Programs have been around since the 1990’s and there has certainly been a lot of discussion as to the good points and the, well, not so good points that pertain to them. I would like to first list some good points that have helped the industry produce the desired results:


  1.  As a result of the programs, standards have been introduced as to how a job will be done. I believe that that has been a great step forward for all concerned in the effort to put the policyholder back whole again. Prior to the first program coming out, everyone had an opinion as to how a loss was supposed to be handled. Through a whole lot of trial and error, most programs have developed an efficient and effective way for their jobs to be handled according to their respective program requirements.
  2. The metrics that have been developed have been specific and have allowed all parties involved in the loss to know what is expected, what is going to be done and when the job is expected to be completed.
  3. The insurance company/TPA (third party administrator) has been able to clearly delineate how the loss will be handled and what the outcome is expected to be. They have set up checklists and time frames that specify how they want the work to be done.
  4. The rudiments of the first program was started by USAA and Paul Davis Systems. The concept has grown since those early days and, as a result, some insurance companies have developed and administered their own internal programs. Other insurance companies have hired a third party administrator (TPA) to handle the claims for them.
  5. Some insurance companies have developed their own software, while others have specified what industry software they want used and how they wanted it used.
  6. The interesting part is that every company seems to want it done their way. Wow, what a concept - if it were my company, I know that I would want it done my way also!
  7. The insurance company comes at the loss from a different direction than the contractor does. The insurance company wants to know, as soon as possible, what the price will be to do the work. They want to know the standards under which the work will be done. They then want to know the time frame that the work will be done in. Those are all relevant and correct things to want to know and expect.
  8. The contractor wants to please the insurance company and therefore is willing to do things the way that the insurance company wants the work done. The insurance company doesn’t know, nor necessarily care, what other programs the contractor is on or how other programs are being administered, they want it done their way. It’s the responsibility of the contractor to deliver the product to the policyholder, the way that all have agreed to or decline to work with each other.
  9. Metrics are a very critical part of accountability in any business. I believe that Contractor Connection has done a great job of developing a metrics program for contractors to judge by and be judged by. The best part about it is that all participants are kept abreast of the metrics on a regular basis. Contractor Connection has set an upfront contract with their partners, which both sides have bought into. Everyone knows where they stand and who’s doing the best job through metrics, not someone’s opinion!


I would like to suggest some points that need to be discussed by all parties. I believe that discussing and resolving some of these issues would improve the programs and the relationship between all parties.

  1. One of the biggest issues is when the loss will be paid for and to whom. Anyone running a for-profit business needs to be able to plan on when they will be paid, so that they can meet their financial responsibilities to their employees, subs and vendors. If this is not resolved at the start of the job, it will become a very touchy issue the longer the job goes unpaid. The interesting thing is that this issue can be solved very easily by simply discussing how payment will be handled at the start of the job and committing that agreement to a written agreement.
  2. Communication is critically important to the effective resolution of any loss. That means that all parties need to agree on what communication will be done, as well as how and when it will be done. This communication needs to start with the initial contact regarding the loss all the way through to the end of the warranty period.
  3. The relationship should be win-win or no deal. No one wants a lose-lose or a win-lose or a lose-win. The book 7 Habits of Highly Effective People thoroughly explains these four scenarios. The major point that I want to make is that all sides need to be on the same sheet of music in order to have a successful relationship.
  4. Some programs have a reputation for throwing their contractor members under the bus without properly determining what actually happened and how it can best be resolved. Both programs and contractors have a tendency to do this to each other on a regular basis. One program has a reputation for “putting the bus in reverse and running the contractor over again, just to be sure they got him!” One thing that I’ve learned is that once you go negative, it’s very difficult to get back to being positive.
  5. All of us have the ability to professionally work with each other. I believe that the best way to keep things on an even keel is to meet regularly as equal peers and listen to each other. This will generate opportunities to trust each other and to improve communication between peers.
  6. The dispute resolution process used by the industry has received a lot of spirited discussion from contractors. The major part of the discussion is the unilateral method that a construction company is removed from a program. It would seem that the insurance company might consider employing the same methods in dealing with the contractor as they expect the contractor to deal with the policy holder.

If you want to talk about any of these ideas, please feel free to contact me. Here’s to wishing you good business and good profits