Because Experience Matters with Jack Hanks

Special Episode - Debating the Pros and Cons of Using Lump Sum Contracts

May 16, 2022 Jack Hanks
Because Experience Matters with Jack Hanks
Special Episode - Debating the Pros and Cons of Using Lump Sum Contracts
Show Notes

Host: Jack Hanks

Special Guests: 

  • John Woods, Partner of Green Klein & Wood -  representing insured property owners recovering insurance proceeds after casualty events.
  • Nick Forsell, CEO of Atlas Restoration - a full-service general contracting company.
  • Bradley Gardner, Founder of Hometown Restoration  -  a roofing and insurance restoration company.

Episode Summary

There is a hot debate in the contracting and public adjusting space that could very well impact your business and revenue stream today. If you're not up to speed on Lump Sum bidding and processing, you're already behind the curve.

In this episode of Because Experience Matters, you'll hear both sides of the argument for and against Lump Sums from four industry experts with opposing views. We cover potential price-fixing by using Xactimate, implications for and against using Lump Sums, the legal environment surrounding the debate, and so much more.


  • (01:20) Episode overview: Lump sum bidding and estimating system 
  • (02:58) Why do contractors get wrapped up in the insurance claims process? OR Should contractors be involved in the insurance claims process?
  • (10:13) Writing profitable invoices without Xactimate.
  • (15:32) Should you finance all your claims? 
  • (18:20) Navigating proprietary information: when insurance companies ask for too much information. OR Getting denied and underpaid by insurance companies for not providing proprietary information
  • (32:39) Finance and then walk away: why you shouldn’t do that.
  • (38:39) Why attorneys, appraisers, and PAs are a necessary evil. OR What most people misunderstand about insurance. 
  • (40:37) Using Xactimate: when is Xactimate’s pricing wrong? OR Why you SHOULDN’T follow Xactimate’s pricing estimates.
  • (46:27) Are insurance companies price-fixing by relying on Xactimate? 
  • (49:54) Do contractors know their business financials?
  • (55:28) Threatening insurance companies with lawsuits: why it works and what works differently across States. 

Some Perspectives That Were Shared on Today’s Show: 

  • While getting wrapped up in the claims process is not technically your job as a contractor, it may end up being what gets you to win a job over the other guy. We need to teach homeowners how to advocate for themselves. 
  • We rely on Xactimate because it is convenient to use. However, as a contractor, you still need to know how to write profitable invoices. 
  • Contractors can give their clients the ammunition they need to file a strong claim with their insurance companies.
  • If you finance a project and then walk away, you’re putting your client in a situation where they are fighting their insurance company to approve the scope of work. This drives business back to third parties like attorneys and appraisers. 
  • Insurance is not meant to be a 100% risk transfer (unless you’re paying for that). Insurance is a financial instrument that is meant to share risk. If you set that expectation in advance, you will be less disappointed.
  • Xactimate pricing is not always accurate. Pricing is based on what the market dictates, Xactimate does not reflect the state of the market. Labor and material shortages globally drive prices up, and Xactimate doesn’t keep up with these realities. 
  • Contractors should know their costs and overhead thoroughly.  


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