Air Date: 6-14-2019|Episode 550
You have heard the RIA and IICRC leadership weigh-in on Part 1 and 2 of this 4 Part exclusive IAQradio series that will culminate this fall with signatories to the agreement King and Duncanson giving a progress update and preview of upcoming collaboration activities for the last quarter of 2019 as the industry rolls into 2020’s convention season! This week for Part 3 we will feature a fast paced, interview with AGA committee chair Ed Cross and 2 of his committee members.
In the Part 1 show the Restoration Lawyer said he will be complementing his legal practice to his home state of California by obtaining a license to practice law in Hawaii. The stateside restoration community hopes Ed’s trip across the Pacific to the the US’s 50th state will not be too long as there is much work to do for the AGA to help level the playing field for restoration contractors who must compete in an ever increasing contentious marketplace. Ed’s “mainland” friends and clients hope before departing to the Aloha state he’ll take a page from Arnold Schwarzenegger’s famous Terminator movie franchise and say, “I’ll be Back!”. Charlie Cassani, CR a fellow Californian from the Golden state’s Capital City Sacramento will join Ed for the show along with RIA board member Dave Robbins, CR, WLS, CMP from the Volunteer state and is based in Memphis, Tennessee.
The Global Watchdog will be monitoring the show from down under this week as he is on Australia’s Sunshine Coast in Queensland facilitating RIA’s 2nd Annual Australasian Conference and Trade Show. Please join Radio Joe and the Z-man this week to hear how Ed Cross and his AGA committee plan to help restorers “Make it Better” for disaster victims and insurance policyholders who have suffered a loss!
“The Rise of the AGA”
RIA’s Advocacy and Government Affairs (AGA) Committee is the industry’s first unified advocacy team, seeking to unite the restoration industry and advocate for the best interests of restoration contractors nationwide.
Attorney Ed Cross, has built a successful law practice that caters to the needs of insurance repair contractors. Charlie Cassani has four-plus decades of experience in disaster repair. Dave Robbins is a licensed general contractor with 30 years’ experience in commercial disaster restoration.
Nuggets Mined from Today’s Episode:
What makes you think that the restoration industry wants, needs or is prepared for advocacy?
Ed Cross: As an attorney who works for contractors, we are confronted with increased troubles contractors have with TPAs, building consultants and standardized pricing platforms. Decaying business conditions are driving good contractors out of business. The RIA Advocacy and Government Affairs Committee is here to represent contractors and level the playing field for them, legally and financially, for a claims process that is fair and equitable for all parties.
As an “old dog” with 40+ years of industry experience, why does the industry need advocacy?
Charlie Cassani: After taking an IICRC carpet cleaning class, I attended an RIA event and was impressed; RIA has always had the best educational programs. RIA’s credentials are recognized. I met Marty King, who advocating educating your competitors and raising the body of knowledge. The tech side should drive how we do the work. AGA is part of Marty’s vision.
Contractors are being bullied by the insurance carriers because the industry is fragmented, we must unite, there is strength in numbers.
What do you hope advocacy will change in the industry?
Charlie Cassani: Equal footing for Restoration Professionals and isolation and elimination of the bad players.
Why did you agree to serve on the AGA committee?
Dave Robbins: I sought out the opportunity to serve on the AGA committee not just to give back to the industry. My grandfather started in the industry in 1962. I want to preserve the industry for the future.
Our firm specializes in large losses, we don’t do program work. We hear feedback about Building Consultants (claims consultants) and TPAs having entry level knowledge and experience at best who audit and question the decisions and costing of experienced contractors.
Ed Cross: TPAs mandate that insurance repair contractors work on thin margins, and then invoices get slashed below the discounted prices. Some contractors have been forced to close their doors due to falling margins. Insurance companies have an obligation to pay what is usual and customary. It’s likely there wouldn’t be a need for third party building consultants if all contractors billed appropriately. It’s time for the industry to unite, stand up and speak with one voice! The auto repair industry fought back against lowball pricing in its vendor programs. TPAs are growing. Due to disappearing profits from TPA work, many contractors are reducing the size of their service areas to minimize travel costs, and others are withdrawing from programs altogether.
How is the AGA reaching out to non-RIA members?
Dave Robbins: We want everyone to know about the AGA. The AGA is there to represent them on the day-to-day struggle. We have a major presence in social media and in all the major trade journals. The AGA is positively impacting restorers.
Are opponents of the restoration industry lobbying for their own special interests?
Ed Cross: Yes, on a large scale. In Florida, for example, the insurance industry recently crushed the Assignment of Benefits provision and passed a new law favoring insurance companies and hurting contractors. While insurance companies are showing massive surpluses, contractors’ profits are diminishing. Contractors need to join RIA and volunteer to join the AGA Movement.
The AGA is only six weeks old, anything to show so far?
Ed Cross: The milquetoast attitude is over! Yes, significant accomplishments have been made. We’re focusing on 3 things: People, Ideas, and Money. The AGA is taking positions on important issues. There is a banner on the RIA website. Over 100 members have submitted commitment pledges. Fundraising is happening. Warner Cruz has agreed to chair the AGA fundraising committee. Pricing is the first issue!
Dave Robbins: The pricing committee is preparing Ed Cross for an upcoming meeting with Xactware to discuss: errors, omissions and misconceptions about pricing (the myth of 10% overhead) and how more accurately convey this information to insurance carriers.
Charlie Cassani: The pricing committee is reviewing the increases in Prevailing Wage over the past several years compared to Xactimate increases.
Charlie Cassani: Is pleasantly surprised by the energy and success of the AGA. RIA members are investing in the AGA. AGA is making every effort to keep these investments consistent with the needs of the Committee. Goal of raising $100 per member to fund the first 6 months of the programs. More money is flowing in than was expected.
How will the AGA induce beneficiaries of the advocacy who aren’t RIA members to pay their fair share?
Charlie Cassani: If we can show some gains and results that benefit the non-members, then hopefully they will join the effort.
How has the AGA reached out to franchisors?
Ed Cross: High level discussions are occurring between the AGA and major franchisors. It’s not just about putting more money in contractors’ pockets, it’s about creating a fair environment and leveling the playing field for oppressed contractors.
What is the plan for hiring lobbyists?
Ed Cross: Most laws that affect restorers are state laws, rather than federal laws, so most of the lobbying will be done at the state level. We are evaluating where the greatest needs are for lobbying and will be concentrating efforts and resources in those areas. I encourage contractors living in states with bad contracting laws to call me. Once a state is identified we’ll shop for a lobbyist in the jurisdiction who knows politicians sensitive to our needs and the needs of consumers. The AGA needs to take bold action.
Z-Man- Suggestion, once a state with bad contractor laws is identified RIA should muster 100s of member contractors to “circle the wagons” and conspicuously drive lettered vehicles at state capitals to gain publicity for the cause. Ed Cross loves this idea.
Charlie Cassani: I’m no longer a business owner, I’m now an employee. Program work often gets skewed by adjusters and TPAs. Our firm does day-to-day program work while concentrating on growing our large loss division.
Ed Cross: California is a strongly pro-consumer state. In CA, its required that contractors provide a lump sum fixed price for before any residential work can start. This is hard for restoration contractors who perform emergency service because the extent of damage is difficult to ascertain by visual inspection. Water damage, for example, is a progressive condition, and it is often impossible to determine in advance exactly how long it will take to dry a building. There should be an exception to the lump sum requirement for emergency service, or some other accommodation. In the meantime, as a work around n states that require a lump sum price for residential emergency service work, I suggest not writing a scope that requires the contractor to return the property to “pre-loss condition” if the price to do so is unknown. Instead, the scope should be limited to a specified list of services, for a certain number of days, without making a commitment as to whether it will result in complete restoration. If additional work is required, the contractor can propose a Change Order, which the customer has the right to approve or disapprove.
Dave Robbins: Building owners, adjusters and contractors sign a contract for a large loss (100K-250K). At the outset, the driving factor on the claim is to minimize Building Interruption. Unexpectedly, late in the in the 3rd quarter [of the proverbial football game], the insurance carrier brings in a Building Consultant who wants to audit and renegotiate prices after the fact, forcing the contractor to make costly price concessions, in essence “buying” payment check at the end of the job.
Ed Cross: The contractor’s choice is to “buy” the check … or litigate. Some insurance Building Consultants are turncoats from within the restoration industry. There is a need for Building Consultants working for contractors to counteract the insurance companies’ Building Consultants. Overall the restoration industry has been too fragmented to fight back, the restoration industry needs to be willing to “fight fire with fire.”
Ed Cross: “Many hands make light work.” Go to www.restorationindustry.org and click on advocacy. Mark Springer is the architect of the AGA.
Dave Robbins: “Gentlemen, let’s plow the road!”
Charlie Cassani: RIA is the oldest and best suited organization to do this work that needs to be done.
Z-Man- Applauds RIA’s newfound testosterone.
Z-man signing off