Learn the secrets to success writing insurance claims with the Xactimate estimating platform.
The insurance claims estimating world can feel like a wandering in the dessert for restoration professionals. The frustration with the guidelines of program work and having to be reviewed by third party administrators (TPAs) can bring mitigation and construction estimators to a point where they feel lost and leaderless. Anyone who manages projects within the insurance claims industry must familiarize themselves with reading and writing Xactimate estimates. For those just beginning their journey in estimating insurance claims, you will find our Three R’s of Mastering Xactimate for Beginners to be a helpful baseline for success. The cloud of mystery that surrounds the stone tablets of this industry standard may scare and confuse many, but with the help of these ten commandments for Xactimate mastery you may find that you can achieve success.
Estimating with Xactimate Commandment One
Thou shalt sketch accurately. Regardless of the tools that you use, make sure that you get your sketch right. An accurate sketch is the key to creating a solid Xactimate estimate. Sketching from the site is one of the best ways to ensure you get odd corners and turns in a unique layout accurate as well as capture all of your line items. Second best is utilizing sketching programs or a good graph notebook. If you are new to sketching for construction estimates, property restoration or Xactimate, check out this video on the foundations of a good diagram.
Estimating with Xactimate Commandment Two
Thou cannot take too many photos. For those who started in the industry when we had to print photos or save them on 3.5 in floppy disks, there may be some hesitation to take too many photos. With modern digital technology this is no longer true. The more photos that you take the better. Always take photos of the front of loss, source, shots from all corners of affected rooms, affected materials, equipment and any unique components of the claim. Learn what carriers and adjusters are looking for as it is a terrible waste of time to have to run back out to a project just for one shot to justify a key line item.
Estimating with Xactimate Commandment Three
Thou shalt label they photos descriptively. Common descriptions should include the room name and what is being represented with the photograph such as “Kitchen floor damage” or “Living room ceiling affected”. Carriers are often requesting that photos be uploaded in relationship to the sequence of rooms in the sketch, this can be easily done by dragging photos into the rooms when uploading into Xactimate.
Estimating with Xactimate Commandment Four
Thou shalt utilize thy F9 notes. F9 notes can be used for formatting but breaking up large sections of line items into categories that make the estimate easier to read for reviewers, adjusters and your production teams. F9 notes can be used to describe how a line item is being utilized, for example DRY LF may have an F9 note of “Repair flood cuts for common wall to bathroom” especially if there is another drywall line item in the room that may be for the ceiling or separate section of wall. If you ever utilized a labor (LAB) line item you must understand that it is going to be questioned and should have an ample F9 note, photographic support for the scope being requested and best to have the designation as “approved by adjuster,” assuming that you have already discussed it with them. Communication is key, utilize this simple function.
Estimating with Xactimate Commandment Five
Thou shalt document your initial findings. Whether it’s a 12 hour update for a mitigation claim or a loss narrative for a repairs claim, you need to communicate the conditions you have found once you have completed your inspection. For mitigation projects you are communicating the site conditions, source and drying plan. For repairs projects you are confirming the site conditions and outlining the scope of work that you are estimating for. Samples of what should be covered in the twelve hour update as well as the loss narrative for Xactanalysis include:
Sample 12 hour update for mitigation projects in Xactimate:
Sample loss narrative for repairs projects in Xactimate
Estimating with Xactimate Commandment Six
Thou shalt update thy adjuster in real time and document consistently. One of the keys to success for any organization or project management system is communication. A key principle for communication in the insurance claim industry is no surprises. Utilize email, text, phone calls and third-party programs such as Xactanalysis to communicate consistently and clearly with all parties. While some adjusters may have you wait until the end of a claim to compose all of your supplements and changes, you want to make sure that you aren’t waiting until then to communicate and acquire some form of written approval. You want to build relationships with adjusters and claims administrators and communication is a means to making their job easier by not surprising them with alterations to the plans previously agreed to.
Estimating with Xactimate Commandment Seven
Thou shalt learn thy carriers guidelines. While it is impossible to remember all of them unless you are able to specialize with specific carriers, it is important to know the key rejection line items. Pay attention to what you are getting rejected for. Try to not repeat the same mistakes with the same carriers. Every carrier has their general rules as well as their idiosyncrasies. For example one carrier will want contents as CON LAB and another will want to see it as CON ROOM. It should only take one rejection for you to understand and remember which carrier prefers the line item one way or the other.
Estimating with Xactimate Commandment Eight
you do not want to be constantly frustrated by rejections you must quickly learn which line items will get rejected by reviewers or will require adjuster approval. When working with third party administrators (TPAs) you will have to work through layers of review and approvals based upon insurance carrier guidelines. If you have a scope of work that falls outside of the norm you will need to get in communication with the adjuster to discuss how they would like that scope of work broken down. A scope and line items that may not pass through the normal review process can be overridden if there is ample explanation through F9 notes, photos and the designation that this has been “approved by adjuster”.
Memorization of line items can help boost Xactimate estimating success and expedience
Estimating with Xactimate Commandment Nine
Thou shalt know thy line items – thou shalt understand thy line item descriptions. When you start writing estimates in Xactimate you need to take some time to familiarize yourself with what is and isn’t in a line item. As a general rule, most carriers do not want you to utilize labor (LAB) line items as in theory everything that needs to be done should be covered in a line item scope of work. For those items that are out of the ordinary you need to ensure that there isn’t an Xactimate line item that covers the work you are requesting labor for. Also, ensure that you aren’t duplicating a scope of work that is already covered in the line item while also ensuring that you aren’t cutting yourself short by missing items that are omitted from the line item description.
Estimating with Xactimate Commandment Ten
Thou shalt learn to master the tri-fecta of service, expedience and accuracy. Restoration creates the challenge of getting in and getting out expediently while providing a quality service and communicating with multiple parties. When the scope of work falls outside of the timeline requirements be sure to communicate and update frequently. Restoration professionals have to be skilled in the construction and mitigation trades, must be able to provide a high level of customer service which is grounded in communication and are required to be technologically proficient to utilize the industry tools.
Insurance claims estimating mastery starts with knowing the guidelines of Xactimate
When Moses came down from Mount Sinai with the two stone tablets, there were questions and fear, but there were also some clear directives. Xactimate and program guidelines generate similar emotions but one cannot argue that there are keys to success when working with the estimating software. You can argue all you want about who gave the directives, who is interpreting the guidelines and whether the system is fair, but you also had better apply your energy to learning Xatimate’s keys to success. If you are just starting out in your estimating journey, you may find our Three R’s of Mastering Xactimate for Beginners to be helpful. Insurance claims are subject to some level of interpretation so mastering the tools of the trade is essential to achieving success with the process.
Contact us for coaching and consultation with estimating, project management and process improvement.
Success in property restoration for insurance claims starts with Xactimate estimating mastery.
If you work with insurance claims you will want to familiarize yourself with writing and reading Xactimate estimates. This is true whether you are an adjuster or a restoration professional. Xactimate has become the standard for the majority of insurance carriers and third-party administrators (TPAs).
If you are new to Xactimate we have three tips that will help you master the best practices for this estimating platform.
Xactimate tip number one for beginners
You must learn from rejection. You are going to get rejected, it’s part of the process. Pay attention to what you are getting rejected for. Try to not repeat the same mistakes with the same carriers. Every carrier has their general rules as well as their idiosyncrasies. For example one carrier will want contents as CON LAB and another will want to see it as CON ROOM. It should only take one rejection for you to understand and remember which carrier prefers the line item one way or the other.
Xactimate tip number two for beginners
You must learn from repetition. Xactimate is designed for the straight forward losses. While we may disagree on the percentage of claims that are “typical”, there are going to be losses that break with the norm. For the majority of your losses, once you have a loss format that has been accepted you can either create a macro or just cut and paste that format. In my opinion macros can be more work than they are worth but there are plenty of Youtube videos on how to construct these. Memorize the codes and line items that you utilize most frequently and utilize prior approved estimates as standards for future claims.
Xactimate tip number three for beginners
You must learn from relationships. Get to know your local adjusters. For those losses that break from the normal, in and out claim, make contact early and often with your local adjusters. You will learn what they see as simple approvals and what their idiosyncrasies are for the carrier they work for. Once you know the adjuster, make their job easier. Don’t contact them for every little change but rather have your items in order so that you can discuss the claim and make a reasonable request that serves the client as well as meets the guidelines of the carrier.
Xactimate best practices for success in claims estimating
It is helpful to have a consultant or mentor, whether this is an internal resource or someone you pursue from outside your company. There are helpful Youtube videos, independent training programs as well as courses that you can take. (If you are learning to sketch in Xactimate you may find this video helpful) Don’t let fear prevent you from reaching out to someone through email, LinkedIn or for coffee. For most professionals in the industry mastery has come through trial and error. If you want to survive and succeed in the insurance property claims industry, you must learn from rejection, repetition and relationships.
Contact us for coaching and consultation with estimating, project management and process improvement.
How gardening best practices can be applied to management and organizational behavior.
Gardening best practices affect landscaping behavior. As you drive through your neighborhood, the conditions of the lawns either make you feel better about yourself or question your abilities. It may be much the same when you assess the conditions of the marketplace when you size up your competition. Beautifully manicured lawns are a site to behold and the majority of the population, the status quo, wonders who has the time and resources to maintain such a high level of performance. Management best practices affect organizational behavior.
Status quo does not create success.
Organizations that sit atop their industry are revered in much the same way that the best garden in your neighborhood is. How do they do it? What is it about these individual and team practices that lead to such a consistently high level of organizational behavior. We revere their productivity so what can we learn from their approach that will help us improve our own systems? What do we need to do in order to compete in that same level of success?
Let’s explore some of the lessons and similarities between gardening and organizational behavior.
Organizational behavior: The misuse of the grass isn’t greener ideology
Those in a position of leadership often lament how modern employees show no loyalty to organizations. A common phrase among short sighted leaders revolves around how employees will leave for fifty cents more to a sub-par competitor but they don’t realize, “The grass isn’t always greener on the other side.” Unfortunately the reverse isn’t true, its not as though organizations have remained distinctly loyal to their employees in a manner that would warrant reciprocal loyalty. In their book Insuring Tomorrow, Author’s Tony Canas and Carly Burnham discuss this workforce schism, “Millennials have a different definition of loyalty than previous generations did. For Millennials, loyalty means, ‘I worked very hard while I was there.” Both parties have grown to distrust each other and organizations that want to thrive will need to reinvest in means to demonstrate to their existing employees and recruits that they value performance.
Organizational behavior: The cattle isn’t always fatter on the other side
Organizations need to understand that the cattle on the other side of the fence aren’t always fatter. Leadership may think that their employees can be easily replaced, but it may be harder than they think to find good talent. Additionally, their competition may not be working with any greater talent than they are but perhaps their structure, systems and culture enable people to thrive in their areas of strength rather than focusing on their areas of weakness. Good gardening and good management practices facilitate organizational performance by working with what you have. If leadership does not want good employees leaving for marginal increases then they will need to create workplace environments that communicate greater value in the person, position and development of their team members. Leaders have to care for their gardens.
Organizational behavior: The grass is greener where you water it
Do you want your team to grow and thrive? You have to water it daily. Areas that you neglect in your yard become obvious rather quickly as the grass withers, flowering weeds pop up and crab grass infiltrates the landscape. Each of these conditions is a symptom of a lack of care or neglect in areas of your yard as well as your organization. Within the organization these indicators are not always as obvious, they require greater awareness of the people, processes and productivity of the team. What can we learn if we take a few of these under performing manifestations from gardening and apply them to organizational behavior?
Management best practices: Withering grass within the team
Keys to change:
Management best practices: Flowering weeds within the organization
Landscaping that has flowering weeds is one that has the resources to flourish but there is a misapplication of effort and/or values. This team has resources and may well be stocked as well as staffed for success but negative behaviors are being rewarded. Greenery can be observed across the yard but it is riddled with weeds that from a distance appear to be flowers. This type of organizational behavior is common in high producing teams where structure is ignored. Cultures that are led exclusively by the numbers or results, regardless of the long term impacts are often the ones that fail to correct negative behaviors before they come back to bite them hard.
Keys to change:
Management best practices: Crab grass woven into the fabric of the team
What is the definition of crabgrass? Crabgrass (n.) a creeping grass that can become a serious weed. This may be the more difficult of the three examples to identify and resolve as symptoms such as crabgrass are rather sneaky in how they infiltrate teams. From a distance it looks like its green and healthy but up close it isn’t right. The underlying leadership issues is the failure to identify and address issues when they are small. Bad behavior isn’t being rewarded but it also isn’t being addressed and the culture is not being proactively cultivated. This could be the wrong people on the bus, to borrow concepts from Jim Collins Good to Great, meaning team members that don’t fit the vision and values (if those are even clear). It could also be that the right people are on the team but they aren’t yet in the right positions and therefore are struggling to affect change due to misplacement.
Keys to change:
Average effort applied to organizational behavior will result in below average team performance
Any business today that embraces the status quo as an operating principle is going to be on a death march. – Howard Schultz, former CEO of Starbucks
If you want to have a presentable (above average) yard, it does not require a great deal of effort but it does require consistency. A good yard does not require super human abilities. To cultivate a beautiful yard, you will need to make an above average effort in the system and maintain consistency. A beautiful yard does not require a wizards touch. Much of the work is in the preparation of the yard in a manner that it can be maintained. Often the difference between the results is found in the consistency of the effort. Understanding the best practices for management and organizational behavior can help you move in the right direction for the performance of your team.
Above average effort applied to organizational behavior will result in above average team performance
We cannot effect meaningful change if we become complacent, if we become comfortable with our own positions in the status quo. – Cyril Ramaphosa, president of South Africa
Good leaders find enjoyment in the challenge, the process and the results. Good leaders are not super heroes they just refuse to melt into the mess of the status quo. High performing organizations are not unicorns, they are composed of teams of people who take pride in performance and rise to the challenge of their competitive environment. There is no myth or mystery to consistently building towards high performance as an organization, it takes a lot of hard work. The tools for success include vision guiding effort, values directing productivity and consistency in the collective contributions of the team to reach the goals of the organization.
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Structure your team for success with the right view of span of control, interactions and direct reports.
When an organization grows beyond the one-person operator delivering goods and/or services out of their garage, the process of building systems for success becomes essential to long term health. What works as a small company has to evolve as the company grows or the organization will outgrow the preceding systems. As an organization grows, adapts, changes and evolves, one question every leader and organizational system must answer is how many direct reports any given person in a position of leadership should have. At the end of the day this question has no right answer given that each organization is unique and each manager has a different threshold for efficacy. Let’s take a look at some of the metrics, discussions and insights related to the topic of finding the right number of direct reports.
Gauging interactions (energy output)
How do you measure efficacy when assessing the right number of direct reports? Business Insider took a peek at the number of reports of Tim Cook, the COO made CEO of Apple, who was believed to have upwards of 17 direct reports. Hal Gregersen, Ph.D., the executive director of the MIT Leadership Center states, “It's a question of how many people a leader can have a constructive conversation with when everyone is in the same room (Lebowitz, 2015).” Time is a limited resource that every manager only has so much of and trust is the greatest asset in developing employee engagement in an organization, the question is not how thin can a leader stretch themselves but how effective they can be in leading the members of their team whether directly or indirectly.
Business journals and many persons in a position of leadership (PIAPOL) site Japanese management philosophy and regard 6-7 direct reports as the maximum number that a leader can effectively manage. In his own defense, Tim Cook emailed a response to Business Insider countering that, “"If you have smart people, a strong organizational culture, and a well-defined and articulated strategy that everyone understands, you can [have] numerous direct reports because your job isn't to tell people what to do.” Whether those analyzing a leader from within the organization or from the outside agree with the direction and decisions that they make, at the end of the day they will rise or fall based upon how they approach their leadership responsibilities.
Measuring span of control
So much of this discussion on the optimum number of direct reports is opinion based, one metric cited by Schaffer Consulting remarks that span of control is something which can be measured in this discussion, “When a manager goes from four to five subordinates, his potential interactions with them increase from 44 to 100 over a given period; and going from seven to eight subordinates raises the total interactions from 490 to 1,080 (Inc.).” This is a classic business concept that continues to be of relevance and value to organizations such as the United States Air Force in their goal of focusing missional clarity. Size of the organization obviously comes into play and the overall structure of a team must be crafted to support it’s necessary functions as well as it’s growth goals.
As for the ethereal question "What is the right span of control for a manager," a consultant Jamie Flinchbaugh blogged, "Some factors to consider are: The narrower the span of control, the more coaching at the point of activity can be done; the broader the span of control, the more the entire process can be encompassed within fewer decision makers and more aligned decisions (The Build Network, 2014).” This is a simplified means of looking at the bigger picture, but a leader must analyze the position they are in with regards to the development of their organizational structure to determine where their immediate efforts are most valuable. Does the leader need to be directly involved in the training of key share holders in the building process or do they need to take a few steps back from the process to empower those on their leadership team to take ownership for their areas of responsibility.
Avoiding top heavy management
If the number of direct reports is too low, because the team has built multiple layers of upper and middle management to insulate those in positions of executive leadership there is a potential for disconnect. When an organization becomes slow and top heavy by way of structure, there are too many layers to weave through in order to accomplish anything in a timely or mission centered manner. As far back as 1989, Jack Welch, the CEO credited with turning GE around, was an advocate against the six direct report rule for many of these reasons. In an interview with Harvard Business Review, the management guru shared his candid thoughts on the matter, “We took out management layers. Remember the theory that a manager should have no more than 6 or 7 direct reports? I say the right number is closer to 10 or 15. This way you have no choice but to let people flex their muscles, let them grow and mature. The leader can focus only on the big important issues, not on minutiae (Tichy & Charan, 1989).”
Systems should be built to support the people in the field who are making the products and/or delivering the services that make up the core functions of the organizations value interaction with the market. The question of the right number of direct reports is not a matter of ego nor strictly of science, but rather is a key discussion that will evolve with the needs of the organization in a manner that is unique to that team. Mike Myatt, Forbes contributor and chairman of N2 Growth, shares, “Where many leaders become disoriented is by confusing platform with people, and position with responsibility. Here’s the thing – it’s not about the platform, it’s about the people. Without the people there is no platform, and ultimately nothing to lead. It’s not about you (the leader), but what you can create and influence through those you lead (Myatt, 2012).” Rather than looking for the perfect number of direct reports, a leader should ask how many people they can effectively support to keep the vision and mission of the organization moving forward with relationship to the team’s values.
Clarity. Consistency. Accountability.
Lebowitz, S. (July 8, 2015) Apple CEO Tim Cook now has 17 direct reports – and that’s probably too many. Business Insider. Retrieved from http://www.businessinsider.com/apple-ceo-tim-cook-has-too-many-direct-reports-2015-7
The Build Network (April 3, 2014) Wait, how many reports direct reports did you say you have? Inc. Magazine. Retrieved from https://www.inc.com/the-build-network/direct-report-challenges.html
Tichy,N., Charan, R. (October 1989) Speed, simplicity, self-confidence: An interview with Jack Welch. Harvard Business Review. Retrieved from https://hbr.org/1989/09/speed-simplicity-self-confidence-an-interview-with-jack-welch
Myatt, M. (November 5, 2012) Span of control – 5 things every leader should know. Forbes. Retrieved from https://www.forbes.com/sites/mikemyatt/2012/11/05/span-of-control-5-things-every-leader-should-know/#7f921b0328c8
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