workers comp.

Dave Palmer

what are you paying for workers comp? Mine just went up again today. I'm only a 3 man shop with no accidents ever and its up over 6k. Add this to health,property and truck insurance, its enough to bring a grown man to tears.Thanks Dave

Dale_4

work comp

I work for a mechanical contractor with 100+ employees. Our EMR is less than one, and our insurance costs are increasing like yours. Six thousand for 3 people and no accidents is expensive. We shopped around and were able to reduce the amount of the increases. I would think that if you have never had to file a claim that there would be an insurance company that would be willing to work with you.

Al Letellier

workers' comp

Here in Maine the current rate is approx $7 per $100 of payroll. We're a small shop too and got actually saved a little money this year over last. We had been with the same agency for 7 years and did some shopping around. It pays!!!
Keep your agent honest and check around every year!!!

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Heatermon

Here in California

We are in a mess. The Workers comp rate is based on the type of work and its payroll. Just so you can see where we were last year and the increase this year:

(All rates are as a percentage of payroll - or - Dollars per $100.)

Last year - Clerical=.96, Retail store (in-house employees, mainly warehouse people)=5.81, Plumbing/refrigeration techs who make more than $21.00 per hour=6.72, Plumbing/refrigeration techs who make less than $21.00 per hour=14.37.

This year - Clerical=1.93, Retail store=10.29, Plumbing over $21.00=11.47 and under $21.00=25.62

However, we are eligible for a 17.5% discount because we have no claims in over 5 years. I am lucky that as a corporate officer I do not have to participate in this "legalized extortion", but we are required to provide this "benefit" for them. Unfortunately, the only way we have dealt with this problem is to raise our rates to our customers and let them know why it costs so much more for our services. By the way, our liability insurance just came up for renewal and went up just like the workman's comp. I've benn telling all my "competetors" that we need to raise our rates to over $300 per hour - and stick with it until this insurance "mess" is cleaned up. I'm afraid most of the people I've talked to have dropped both the number of employees and their insurance saying "If we screw up, then they can just HAVE OUR BUSINESS. We'll get new jobs selling insurance." Don't know where this is going, but it's going to be interesting.

Good luck to you all,

Heatermon

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Rock Solid Restoration_3

workers comp

Just be happy you're not in the concrete business. I was just quoted $9,800.00 from the State Insurance Fund of New York for one man based on an annual payroll of $30,000.00. I have never had a claim.

I just wish they would call it what it is - another tax.

It is amazing to me how small business is treated in this country. Where would everyone be without us?

Dave Palmer

liability

insurance is incredible too,I'm in the fuel oil business too so that adds up.Years ago you could wave it and just have a insurance policy to cover employees just in case, not anymore.Granpa didnt see all this years ago.

Dave Palmer

lawyers would be sitting

in a damp hole.My father inlaw was a architect for major commerical aluminum window and door company. He would say "I designed those" I always said,yea but guys like me had to build and install them.Problem is everyone is sue happy and now we are paying for it.When we load trucks at a major terminal in the city, my guy HAS to wear a hard hat and eye protection.If he slipped and fell 10 feet off the truck what would that do for him?

[Deleted User]

Be careful out there...

As an officer, when you "opt out" they are assuming that you no longer work in the field, and are forever tied to a desk and if you DO become injured in the field, you have no coverage.

A lot of people see this as a way to save money, not realizing the jeopardy they are putting themselves into.

Read your policy carefully. If you go into the field just once a year, touching equipment and tools, you should be on that rate schedule.

ME

Bryan_5

Just thought I would post a response to this thread. You guys have helped me out as a homeowner so I thought I would help you out as an insurance agent. I hope this doesnt get me bounced from your site There are several reasons why your rates are going up and none of them have to do with you.

1. The first is 9-11-01. The insurance industry paid out aproximitly $40 billion dollars. They need to get there money back. They are in business the same as you to make a profit.
2. There have been a ton of claims the last few years and the industy has taken a real hit. Liability claims have been getting bigger and bigger. As well as property claims from storms ect. Work comp claims are getting bigger as well think about the last time you went to the doctor. How much did it cost?
3. The biggest reason is the stock market. The insurance industry does not make its money totally from premiums. For every dollar you send in your company probly pays around 68cents in claims. And another 35 cents for expenses ie..light bill, advertising, wages ect.. That equells $1.03, how the company makes money is by investing your dollar. They hope to get back say $1.06. Well let me ask you this how much did your 401k make last year?

What can you do? A few things. Ask your agent if the company offers a dividend for workers comp. This is money paid back to you based on claims. This is not available in all states and each company sets there own rates. The amount of premium you pay also determines if you can get one. You may be able to get one from another company.

Also consider raising your deductibles on your tools and equipment you may be suprised by the difference by going up to the next level. I am amazed at some of the business's I insure that do $500,000 in sales and have a $250 deductible for tools. Switching companies should be a last resort in my opinnion. There is often more loyalty with someone that has been insured with a company for 20 years versus 6 months in the event of a problem. The insurance industry is in a turmoil at this time. It happens about every 20 years and usually lasts about 3-5 years. Hope this helped out somewhat.

hot_rod

One question, Bryan

You said the insurance companies need to "get that money back" What happened to the billions they have collected all the years prior to 911 and all the other recent large payouts?

At this rate I will have paid in near a million dollars over 40 years or so, in various insurances. No claims to date.

Sounds to me like the insurance companies squandered the money, over the years, along the lines of the Enron fiasco.

Maybe it's time to get back to small self insured groups like the plumbers that banded together, in New Mexico i believe, and have their own insurance. Too much waste and mismanagement in these mega insurance congolermates, me thinks

hot rod

Bryan_5

Hot Rod,
You raise a valid point. I never said that the insurance companies didnt have the money. They did and they paid it. In fact the insurance industry was the only industry that was directly affected that didnt go to the government looking for releif ie..airlines,travel agents ect. I can certainly understand your frustration with paying in so much and not having had any claims. I dont need to tell you why you need the insurance, that is not the issue. The problem with going the self insurance route is you would need to have alot of contractors in it or you could wind up paying more out of your pocket in the event that someone else had a large claim. Not to say that it couldnt work. Is there alot of waste in these companies? I dont know the answer to that. I do know that the waste is not near as much as it was 20 years ago. But I am sure there is still plenty of waste. I am not here to defend the insurance industry just trying to explain why these things are happening

hot_rod

I appreciate you response

You may be right the insurance companies didn't go to the government for financial help.

They didn't need to! They just doubled and tripled their rates. Few industries get away with that. It may have been cheaper for the rate payers if the insurance companies had hit up Uncle Sam!

Lee Iaccoca (sp) sure did cut a sweet deal when the taxpayer bailed out Chrysler years ago :0

hot rod

[Deleted User]

So...

when things get "back to normal" are the insurance companies going to reduce our rates? Maybe gives us back some of our money? I'll sit over here in the corner holding my breath, OKay...

Insurance companies are like bankers. When it's sunny outside, they hand you an umbrella. When it starts to rain, they take it away...

Our corporate insurance company bailed out on us after only one relatively minor claim. Said they could no longer afford to insure people in the water transportation/heating business. Guess it was OK as long as they were making lots of money, but we file a claim against them and all of a sudden , they can't afford us any longer.

Sorry for the sour grapes...

I wish I could afford to pick and choose my customers.

ME

Bryan_5

Mark,
In response to your question will things get better and will they reduce your rates? The answer is probly. What usually happens is the insurance market will be hard for 3 to 5 years which explains the cancellation you had. Rates will be high and underwritting guidlines will be tight. But one thing always happens in this type of market. The insurance companies will begin to get hungry for more new business and the way they do that is by cutting rates. No one likes the current environment. Its very difficult on the consumer but it doesnt last forever. Ask your self this 4 years ago if you tried switching your insurance you probly had 4 or 5 companies that wanted you and your very easily could have saved 20% by switching. Thats what will eventually happen again but it is going to take some time. And remember dont shoot the messanger.

Heatermon

Exactly

I chose to "opt out" and expect nothing if I get injured "in the field". In my opinion, the "benefits" of coverage are NOT worth the price of the policy. I have "private" insurance policies to cover the things I reguard as "necessary" to me and pay these insurance policies personally.

Heatermon

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Rock Solid Restoration_3

insurance

Are we talking about Liability ins. or Workers comp. here or just insurance in general? I think of Workers comp. as Workers comp. tax. The reason is because you are required by law to carry it and if you don't you will face penalties, so ,therefore you really do not have a choice.

So, you set about begging some insurance agent to find some company somewhere to insure you. You figure since you've been in business for 6 years without so much as a broken fingernail on the job, thank goodness,that they would be pleased to accept your business, not so.

If and when you do find a company gracious enough to allow you to pay them large sums of money for nothing they of course will want that money up front which amounts to being paid one year in advance.

At least with liability ins. it is up to you wether or not you want to csrry it. It's just a matter of at what point is it worth the gamble.

Bill_14

Insurance Costs

There have been times in the past, when material costs increased 5% to 20% on a seemingly regular basis. We became very accustomed with the phrase "material escalation". The same was true with equipment and accessory costs.

What did you do about those increases? Well, you are still in business today, so you must have adjusted your costs of your estimated jobs accordingly…before you bid them.

Insurance is one of the largest overhead costs most any business experiences. It always has been and it always will be. If you do not adjust you COST of doing business on a regular basis, you are simply making a decision to absorb all of these increases in overhead. Sooner or later, you will be working for someone else who has all those old insurance problems you experienced.

If you want to be in business for the long haul, you have to react and adjust quickly by responding to the economy and to the marketplace. This generally means your pricing has to increase in order to survive.

Bill

ScottMP

boys ,boys

Five years ago I had a good honest employee who slipped on some ice walking back tho the truch after installing a hot water heater.

He cracked his back !

What I am PAYING this year for workmans comp would be considered a yearly income in some areas !!

I live in taxachusettes !!

Don't even begin to tell me your cost. Its amazing I can even sit down this year. I don't even get a kiss first.

Why can't I charge my customers just for being there contractor and then when they "need me" charge them more. You know, they have to pay to have me as a contractor on call and then when something happens I get to raise their rates.

Sorry this is not a good subject for me this year.

Scott



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allen h

As a small landlord I can tell you all that insurance rates have taken a jump on rental properties.

One friend has seen his 6 family go from 1500 a year to 4000 per year. No claims. However he does house low income people.

What strikes me as interesting... the insurance companies seem to own the biggest buildings here in Boston (I am in Mass.).

And speaking of insurance... our health insurance has a 22 percent increase this month. For a family plan - 2 adults, one teenager - we went from 780 to 958 per month. Partial drugs & no dental. We cannot even buy it in this state unless we belong to a "group" like small business or chamber of commerse for 200 a year. Toss in the fact that the premiums are not fully deductable which makes it even higher. Now if we landlords increased our rents by 22 percent we can only imagine the press.

I think that the ins companies would go belly up if all industries banded together and self insured. And diversity between industries is the key to it.

I tend to remember when in school I read that insurance when first started was supposed to be .5 percent of buildings value. What on earth has happened?

Allen in Taxachusetts

Steve Eayrs

I apreciate your honesty in coming forward....

and letting us all know who you are, but you asked for it. We are all fed up with the high costs. At least the IRS bases what you pay on the income.
I have a small shop, 6-8 employees,(4) trucks, and insurance companies take about 60K from me a year. I've had years where they have taken more from me than I make!!
Don't tell me about prices going up so they can get paid back! Wasn't the whole idea to collect money, with the gamble that someday they may have to actualy pay some back?
The insurance industry is not hurting, its just hurting small business.
Try to explain to me why the nicest, newest buildings in most cities is the insurance building?
They are about the only industry I know of that spend millions with lobbiest, just to make sure the LAW states you have to pay whatever they want. In our industry that would be called price fixing. How would you like it if the next guy who showed up at your door, to fix your boiler, charged you $500/hr, and you had no option but to pay him. AND it was against the LAW to fix it yourself.
Don't take it too personal but the industry you represent, is about as low as they come.


Steve

Bryan_5

I was deffinitly was not trying to poke a stick in the bee hive on this subject. I agree with what many of you have said on this subject. The only reason I posted my comments were to try to give some sort of an explanation as to why things are the way they are in the insurance market today. I see it everyday and am in business for myself the same as you. Just a different form. My own personal and business insurance have gone up as well. I understand the negative impact of these rate increases are. I dont like them any more than you do. What really upsets me about it is this will force good business out of business.

I will tell you this as a consumer. I would rather pay you $200 an hour and have you insured and know that you can still make a living and are dependable. Versus paying you $75 cash not knowing if you will even have the same phone number when my boiler goes out in the middle of January.

As I said before please dont shoot the messanger. Just wanted to give you a different prospective.

Terry

apreciation

I for one appreciate the fact that you carry enough of an interest in heating contractors issues to give us your input.

Thank you Bryan!

Regards,
Terry

Bryan_5

I appreciate it

I knew I was opening a can of worms by saying anything. I found this site about a week ago and am now hooked on it. I wanted to be able to contribute something back. I deal with contractors everyday and understand what you guys go through. Hope I was able to shed a little light on a very difficult subject. To me insurance companies are a lot like heating contractors. You hate to pay them all of that money but when you need them the most you are glad you spent all that money.