An Insurance Company. Last year during the 50% stage of our construction project, the Insurance Company conducted what they call an audit. What they do is try to determine the value of your construction project so that if it is higher value than the insurance you have paid for, they “jack” your rates. I seriously doubt they reduce your rates should you be under you policy protection amount.
Anyway, since we are talking about only being at about 50% of the project, any figures calculated would be purely a “guess” at what you would anticipate your costs to be. And, that is what they got. A guess of about $1,330,000.00 for the total “Cost Evaluation” of our project. They decided to demand an additional payment of close to $3,500.00 from us based on that amount.
Well, I protested the charges as they were not a true valuation of our project costs, later discovering one of the reasons we had exceeded our budget expectancy of $1,200,000.00 was because one of our Subcontractors had ducked out on us filing bankruptcy, and costing us an additional $80,000.00 because he failed to pay materials providers and we had to hire others to complete work the original contractor had been paid for. And, because the neighbors to our project were set to prevent our ever building where we wanted to build, we spent about $38,000.00 on “legal” fees necessary to acquire our building permit.
Although we had calculated these costs as part of our construction costs, they are not such. These costs are “losses” not part of the construction. These costs do not add to the cost spent on the project, but reduce the profit realized by the Contractor doing the project. So, in reducing the construction Cost Evaluation” by $118,000.00, we are left with a project Cost Evaluation” of $1,228,500.00 as the calculated total.
However, the Insurance Company doesn’t want to wait for the “Official” calculation of these figures. They have literally harassed us for the past two or so days, threatening to “Cancel” our policy if we do not immediately pay them an additional $3,500.00 based on the audit at half project. Now, I have a real problem with this. First, instead of the Insurer having the integrity to tell us we did not need make the policy active until such time the project commenced, we would have saved about $7,500.00 on the policy as it took us 3 months to acquire the building permit because the City had to approve the insurance policy prior to our being allowed to pull the required permit. And, as the policy changes during the last week of that three month period were what got the policy approved by the City, the Insurer charged us 3 months at $7,500.00 for them to satisfy the requirements of the City. Thus far they have gotten us for about $38,000.00 for a $1,200,000.00 policy over a period of 14 months of construction. This coupled with the fact that they are threatening to Cancel our policy has me quite pissed.
And, if you also calculate the costs necessary for me to work at trying to get the necessary insurance needs met and argue over neighbor objections for the period of 3 months, should not my payroll and expenses also be considered part of the loss to this project? I would think so. Deduct $12,000.00 from the project Cost Evaluation and lets revise our total to $1,216,000.00 for the project. Oh damn, I forgot my boss also was on the payroll and had expenses. Let’s reduce it by another $16,000.00. How does $1,200,000.00 sound to you. Holy shit . . . RIGHT ON BUDGET!
So, anyway, I think I need to visit the local State Insurance Commissioners Office this morning with copies of all applicable documents in hand.
Wish me luck. I’ve been taking the shitty end of the stick so much lately it is starting to get good to me, and I do not like it.
Now, why in the heck would the CA Dept of Insurance not have a San Francisco Office? Well, they do not. The office serving the Bay Area is in Benicia, the opposite direction from where I am heading. Ended up faxing the whole bundle to the Benicia Office this afternoon. I hope I sent enough evidence. We will see tomorrow, I reckon . . .
The other thing I had to do today was file a “Variance” relative to the condenser pads at the Sausalito Project. Did all the paperwork, made all the copies, but could not get the check to file the damn thing. Guess I will do that “all over again” tomorrow too. I did make progress with it though. The Plan Checker for the City was cool with all the paperwork and Plan pages. So, tomorrow just pick up the check and drop it and the paperwork on the counter and it is done for the minute. This is nothing more than a “City wants money item,” and currently what City doesn’t?
Oh well, another day in the life of little old me.