Insurance Claims: Hire The Right Restoration Contractor

This article is Chapter Nineteen of my new book, "Commercial Insurance Claim Secrets REVEALED!" The book is presently in manuscript form, and we anticipate a publishing date of June 1, 2009.

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A restoration contractor is very different than a general contractor. Most general contractors who do remodeling or new construction do not have the skills and knowledge that a restoration contractor has.

For one thing, the restoration contractor is very familiar with the insurance claims process, and how insurance companies pay for repairs. The restoration contractors use similar estimating software to that used by the adjusters and insurance companies. A general contractor who submits an estimate in an unacceptable form to the insurance company or adjuster just annoys them, and slows down your claim.

Another reason to find restoration contractor is that they are usually full service contractors. They will be able to do temporary or emergency cleanup and board up. They will own the equipment for drying and water damage remediation. They are familiar with the kinds of damage that fires, wind and water do to commercial building. Finally, they are experts at writing accurate estimates for these specific kinds of damages.

General contractors who do not make their living in insurance restoration do not have this kind of equipment and experience. Period.

Do a search online for restoration contractors in your area. You can also look in your local Yellow Pages under “Disaster Restoration,” or “Fire Restoration,” or “Water Damage Restoration.” Look for logos in the ads that say “DKI,” or “RIA” These are professional organizations for restoration contractors. You can also go to the following websites to identify restoration contractors in your area.

DKI - Disaster Kleen-up International. Headquartered in Chicago, IL, is a network of the leading independent property damage restoration contractors across North America. You can ask for a referral at 888-735-0800, and also find them at: www.disasterkleenup.com

RIA - The Restoration Industry Association is the leading trade association for cleaning and restoration professionals worldwide, and the foremost authority, trainer and educator in the industry. You can ask for a referral in your area at 800-272-7012, or the website: www.restorationindustry.org

Call at least two restoration contractors, if possible. Ask them to meet you at your business location to inspect the damage within 24 hours of the loss.

Remember this important point…there is NOTHING in your policy that requires you to get two or three estimates. Meeting two contractors is just a smart way to find one that you like best and want to work with. Interview them about their experience and expertise. Check out their references, and ask them for a list of satisfied customer that you can call by phone. Get a copy of their insurance certificate to be sure they have liability and Workers Compensation coverage. Call the insurance companies to confirm coverage. ONLY AFTER THE CONTRACTOR CHECKS OUT should you hire him.

You might see many restoration contractors drop by after a loss to see if they can help you with temporary repairs, like tarps on roofs, board-up, and contents removal. Don’t be annoyed...they are trying to get some new business. Appreciate their effort for what it is. Get written estimates from them BEFORE you sign ANYTHING. They will sometimes tell you that they were sent by the insurance company (maybe true, maybe not), and that it is your responsibility to protect your property from further damage (which is true). They may tell you that they will “direct bill” the insurance company (which they may do).

WARNING!!

Be very careful on contents removal, sometimes known as “pack out.” The more contents they clean, the more money they make. The cost to clean something is usually a fraction of the cost to replace it. However, I have seen restoration contractors charge more to clean an item than it costs to replace it. So, when the restoration contractors are involved, the claim value may be reduced, which benefits the insurance company. That is why many adjusters will bring a restoration contractor with them to the loss location. Remember that many policies pay REPLACEMENT COST, and following major fires, large windstorm and water losses, your damaged possessions could be replaced instead of being cleaned. Every penny that goes for cleaning your contents comes from the contents limit of liability shown on your policy declarations page. So, theoretically, a substantial amount of your insurance money to replace your items could go to the restoration company to only clean the items!! If the restoration contractor cleans a bunch of your property, and you reject it as unusable, there will be less money for replacement of your property.

So, if the adjuster and restoration contractor are all gung-ho to pack-out your property, that’s probably a good idea. Getting your property off the loss site will at least prevent it from further damage. But you should be the person that controls which contractor packs out your property. You should also bet the person that controls what gets cleaned and what gets thrown away. This may take you a significant amount of time to sort through, but that time investment will mean a much larger settlement amount.

Under no circumstances allow the adjuster or restoration contractor to make the determination about what business personal property is repairable or replaceable. The adjuster will typically want to clean items and give them back to you. You own the property...it’s your call. Fight hard about this issue!

ANOTHER WARNING!!

Sometimes, adjusters and insurance companies will tell you that you must use their “approved contractor.” Unless you can find that requirement written into the terms and conditions of your insurance policy, don’t believe it. It’s your property. YOU be the person that makes the decision on which contractor or other vendor to use.

The contract for cleaning and restoration of your property will be between you and the contractor...not the contractor and the insurance company. MAKE SURE YOU ARE IN CONTROL!!