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When I saw my first detailed estimate for contents cleaning included ever item in the house I knew my job would be would be simple. Keep track of the paper.  But I had really abdicated my job to a person who was going to run this "one loss up the flag pole". This was over 40 years ago and the cost is billions in "pork" each year  paid for these 50 page item by item line estimates by the underwriters to "insurance restoratrion contractors" on fire, smoke, water and wind claims..

The .45 cent ash trays cleaning bill still stick in my craw. The untack, remove pad, fan dry $15.00 per yard carpet, that I have to pay twice for.  The $6,000.00 dry cleaning bill that has articles from the rag bag cleaned as well as all the worn out sneakers, and none of them are fit to wear when they come back.  The pack up and haul to the warehouse, unpack clean, new boxes and return of ever article in the house on a smoke/fire claim, that cost more than the furniture is worth.

This is going on because the underwriters allow it as the file is documented with lots of paper on the new chapter of the old testiment "the excepted version of the cleaning and restoration contractors "super bowl convention party formulated in Las Vegas  @ 0200 hrs.exactamate.

I am of the opine 48-72 hours will not make any smoke/fire/water claim more costly to the owners or the underwritwers instead of rushing out at first light.

The adjuster should ask the insured to seperate the damaged from the undamaged article, if necessary the adjuster should help and hire helpers to do this WHILE he is on site. The contractors should be on time and expense. The adjuster should hire a clerk of the works to watch the contractors and thousands of dollars will be saved by tossing the trash in the dumpster INSTEAD of trying to save something with very little value before the loss.

Sorry John you opened the door.

 

Here is a recent loss that I can share. I worked a claim last a couple of weeks ago where a well known national restoration company was the general contractor. The dwelling was a mobile home 20,000 on the dwelling and 50,000 on contents. The C&O was a kerosene heater heavy damage to flooring in living room. The entire dwelling was heavily covered with soot and a heavy clean and painting for the entire dwelling was necessary.

The contents was a full pack out with with a detailed line item estimate that was submitted to me. The estimate for the dwelling was 13.900 and the estimate for the cleaning of the contents was 11,600. The restoration company was able to save over 95% of the contents. I was working branch assist and the staff adj. who was first assigned the loss was prepared to pay out the maximum on both coverages due to the severity of the damage.

TOTAL PAID : 25,500

My math may not be 100% but in my book the restoration company saved the carrier a bundle. They also was able to salvage a lot of personal belongings that the insured was very grateful.

Sorry Ray  You left the door open !

 

Ray

 

I must also say that I am amazed  at your comment about waiting 48 - 72 hours to mitigate a water loss. Surely someone with your years of experience and the countless water loss claims you have inspected realizes the damage that occurs during the initial phase when their is water damage to a dwelling that is not properly maintained.

There is generally a rapport between adjusters and restoration contractors. During the frequent water losses we encounter, we generally appreciate the fact that the cleaning and drying gets underway as soon as possible. However, here are a few problems that can arise from the arrival of the restoration contractor before the adjuster:

1. The loss may look very different after even a few hours work by the restoration contractor. This can lead to questions about whether unnecessary work has been done. A few digital photos supplied to the adjuster that show the original state of the loss prior to clean up will generally be appreciated by the adjuster. Supplying the adjuster with a CD or an email attachment of these photos in a timely manner will be greatly appreciated. This will allay many questions the adjuster might have.

2. Keeping a carpet sample of all carpeting removed is very important. Some restoration contractors are very good at this. Others are not. The adjuster can only guess at carpet quality when it has all been tossed in the dumpster and hauled away.

3. Excessive contents manipulation and debris hauling are a problem on the estimates of many restoration contractors. Moving a kitchen table doesn't justify doesn't require a contents manipulation - average room. Movement of all the contents of the cabinets may justify this expense. Halls usually require no contents manipulation. Closets are not average rooms. Movement of the clothes from a closet takes a couple minutes and should not cost $50 in labor. Excessive use of "Move Contents - Extra Large Room" is a red flag for an adjuster.

4. A restoration contractor should understand that, for many adjusters, rounding the room dimensions up to the next nearest foot or using the longest measurements of a room with offsets is not an option. The carriers for which we are working often require measurements to the inch and measuring the main section of the room and each offset separately. They also require that we take our own measurements rather than simply taking a contractor's word for the dimensions. As a matter of fact, a contractor estimate and adjuster estimate with exactly the same measurements for all rooms is likely to raise questions in the mind of the claim examiner about whether the relationship is a little too cozy between the contractor and adjuster. Better to each take your own measurements. Electronic measuring devices makes this increasingly easy.

5. Although many carriers have made a policy of paying the restoration contractor directly, the policy provisions actually provide payment only to the insured and mortgagee. I never make promises that the restoration contractor will be paid directly. The responsibility for payment ultimately belongs to the insured. It is their house. They must authorize all work done on the structure. This is not the legal or ethical responsibility of the adjuster.

6. A claim inspection is not a sales opportunity (in my thinking). I will not refer people to a restoration contractor because he has followed me around on the inspection trying to impress me with his personality or trying to be my friend. Offers of lunch, tickets to football games, or offers of other perks will not impress me or lead to any referrals from me. In fact, I am likely to be annoyed by someone who wants to yak at me constantly while I am trying to concentrate on the inspection. I prefer contractors who leave me sufficient opportunity to inspect the loss uninterrupted, then answer my questions that arise during or after the inspection. I will refer future losses to a restoration contractor who I believe charges a fair price. That is my only criteria for referral.

7. Using the same estimating program does not mean the contractor's estimate and the adjuster's estimate will be the same. This misunderstanding occurs most often with Xactimate for some reason. Considering that my estimate has never been identical to the contractor's and the pricing is rarely the same, I can only suppose that the pricing database used by the contractor version and the adjuster version is different.

In my opinion, one of the top things a restoration contractor should do when dealing with an adjuster is to build a rapport or relationship. Don't try to take advantage of a new adjuster as it will just hurt you in the long run. You might get away with something once but, if discovered that you tried to pull one over, you'll get a bad reputation very fast. Now, the adjuster has to understand what a contractor needs to be profitable and has to be reasonable as well.

I had one local contractor that put a dehumidifier in a house for a very small loss just the rack up a bill. It was not necessary at all. I told to the contractor it was not needed and he should remove it from the bill. His response was that since it was used, if the insurance company does not pay for it, he will charge it to the homeowner. For a few hundred bucks, if he would have removed it, he could have made a friend.

Lets take the fire loss in the MH first.13.8 wide by 64 foot long about 900 sf floors and ceiling about 1500 sq feet of side and partion walls. This is 2400 sf of cleaning. 2000 sf of painting and replace sub floor in living room and carpet 280 sf.

Packout, clean return  all contents only 5 % lost. No thats real good..

2400 st clean @ .20 $480.00

2000 sf paint @ .50  $1,000.00

R&R LRfloor   240 sf @ $5.00=$1200.00  with final clean & O & P about $3500.

UPP Bring in ozone machine close up run for 2 days = $200.00

Bring in maid service 100 hrs @ 18.00                               1,800.00

Laundry & Cleaning                                                                    300.00

Destoryed by heat                                                                    2,500.00

                                                                                                     $4,800. 0r  $8,300 loss

but the point is if the adjuster did not abdicate his job to a recognized insurance adjuster and stayed on the job about $15,000 could be saved by the underwriters with the same result.

Look at D C Marlins last paragraph in his post. The restoration contractor told me that if I did not pay for the rental he would send a bill to the insured. This is what is going on the contractors are telling the adjusters and the insureds what the scope of damage is. They have alrady move in and began work with a signed contract from the insured that states "we will do this job for what ever the insurance company pays you, plus our deductible"

Before you arrived the salesman has waived the Ded amount to the Homeowner. NOW  the big job left is to convince the lazy- in a hurry- don,t know what is going on- adjuster on the phone that his " contractors scope" is the true scope to make the insured whole and no other scope should be considered by the insured. If you as the adjuster do not agree he (the contractor) will call the agent, claims manager and run you down to the insured as a worm or a moss back.  By the way my estimate and scope will not be complete for several days as we are real busy now.  However dont worry as we use the" bible"data base from ExactaMate  which is accepted BY ALL INSURANCE CO's.

Now when you get a  claim like this your life will become harder. The loss is inspected by the contractor within an hour of the water event. The husband is overseas and will not be back for 5 days. All of the above takes place.

When the husband gets home he opens his mail and finds a copy of the adjusters statment of loss and a check made out to him and the contractor. He ask the adjuster for a copy of the estimate . When he gets the contractors estimate he demands an explanation for these outrages charges that he could have done for himself and keep the excessive profit for himself. AS he has as much right to the profit as the contractor who he does not know and certainly did not hire and would not have hired. Now he knows  about the collusion going all the way to the top of the insurance carriers that he has been hearing about.

Is the door still open- anyone want more.

The only loss mitigation I can think of in a clean water sitution that would be worse in 72 hours if water covered the floor coverings. Would be the feet of furniture not blocked up very soon after would have wicking into the legs.

He is a good example of a dis -service to a policyholder. A small modest house with a young couple with children. A clear water claim, with a $1,000. Ded

The wife calls the husband, the wife calls the agent, the person in the agents office sends out ABC. ABC goes out pulls all the carpet and pad out vac's the floor and leaves two fans. Time in house 2 hours. ABC leaves a bill for $1800.00 ,will return the next day to PU fans. When husband gets home with his bud from work to remove the water with his buds wet vac and to remove the carpet he finds the work has been done and the bill. . He is behind in his house payment and expected to do the work himself and get credit on his $1,000 Ded and hopes the adjuster feels sorry for him and allows  the whole $1,000.  to be absorbed in the loss.  He also knows the mortgage company will suck up all the insurance check and he wanted to do all the work himself, and be paid direct after the work was done.

Ain't the system great I own the cleanup company getting my direct payment from the Insurance company. It allows me to pay the bills!

There are good restoration contractors out there, but there are also many bullies. They are forceful, conniving, and deceitful. Unfortunately, in my  years of working with them, the latter seems to prevail. When a clear water loss occurs, it is imperative that the adjuster, (providing he/she knows how to work the loss) take control and begin to guide the insured as to what and how the work needs to be done. One of the slick ways a contractor has to replace carpet is to rip it out and dispose of it immediately. Believe me, many do it. The first thing on the list is to get furniture up off the wet floors by blocking them up, or removing them if it is a bad loss. You can inform the insured on the phone prior to inspection too get bowls, or anything else they might have to block up the furniture. Next is removal of the carpet if it is totally soaked. It does not necessarily require replacement if dried out properly. Call a restoration contractor to find out availability. Have them call the insured and discuss the process with them, as the insured needs to retain the contractor, not the adjuster. Of course explain to the homeowner that you cannot authorize anything and it is their decision as to whom to hire.

If the carpet was heavily soaked, after removal, inspect the drywall at the base to see if the water is wicking up in the drywall, if so, have the base removed and fans put into the rooms after the carpet has been removed. This will lessen the wicking process to drywall does not have to be replaced. Always ask the contractor how much the fans will cost per hour. Moisture removal equipment must be considered if it is  a bad loss. Removing the excess moisture as soon a possible will lessen the extent of damage.

There is always the possibility that the carpet can be wet vacuumed. That being the case, the carpet can then be lifted and air blown under it to dry out. A moisture machine should be in place also. It is recommended that the pad be removed and discarded.

The adjuster, must, at all times, control the process and the restoration contractor. Let them know this upon the initial visit. It is the adjusters job to make sure the amount of expense to restore the insured to pre-condition environment is equitable to all concerned. Some restoration contractors have their own database and do not use any of the software that we as adjusters use. Ask to see prices, if this is the case, as some of them are very inflated. Just use your training and common sense and you will be okay.

Good post Tom. This is the real world.  An adjusters estimate is just paper unless you can get a contractor to do the work on his figs. The contractors estimate is just paper until he gets the homeowner and the adjuster to agree.

My point is the property owner always calls to shorts, not the contractor.  The adjuster has a duty not to recommend settlement on any papers handed him from either of these parties. The adjusters duty is to move,  dodge bullets, compromise and settle losses without being bull dozed by the insured, contractor, PA or attorney.

Work should never start until the scope is on paper. The insured should have a copy of the estimate  used to settle the claim before work starts.

Tom wrote : "I write the estimate and set the cost to repair. " This is not actually true. What sets the cost is the amount that a contractor can perform the services required at a fair and reasonable rate. This rate should include enough for the contractor to purchase materials, provide labor (legal,licsensed and insured). Consideration for the overhead needed to operate a business such as advertising,office cost (including staff), full insurance ,auto expenses , maintenance on equipment and other associated costs. All of this while turning a profit. My experience is that some adjusters(including myself untill I embarked in the restoration industry) have no clue what it really takes to restore a loss and the real costs. They are simply using a program and unit prices that a carrier provided. I do agree that many times contents salvage is a joke and more is spent to save than would be required to replace.

Tom this is not directed at you. I'm just responding and offering this to challange some adjusters to become more than a software operator.
Just my thoughts

It is very obvious from some of the replies that adjusters and contractors have always been and will continue to be akind to the Senate and the Congress - both parties wanting to do what is right (for the insured/insurance carrier) but always at odds with one another.

My two cents of advice to new (and old) restoration contractors is simply to be honest about the job and estimate damages correctly.  Too many times I have arrived at a water loss 24 hours after it has occurred to find a soaked 10-year old carpet being dried with an overabundance of blowers and dehumidifiers.  It was obvious the old carpet should have been cut up and removed because it is going to shrink after it dries, can not be re-stretched and will have to be replaced in the end.  The contractor knew it as well as I did when I inspected the age, quality and level of damage to the material.

A good "water-out" contractor knows this and does what is right.  and conversly, a knowledgeable adjuster would not try to dry the carpet and would know to take it out so real drying of the loss may begin (and not try to dry the old carpet and get points for saving the carrier a few dollars at the expense of an unhappy insured).

There are good and bad players on both sides of the business of insurance claim restoration.  Our only saving grace is we all become as educated as we can (adjusters learn what it takes to actually do restoration and contractors learn what adjusters must deal with when working with insurance carriers) and do what is right so the insured is serviced, the claim and payment are true to the policy and the adjuster and contractor can stay in business to "fight" another day.. 

 

Well said, and Amen !

Measurable units will always be a problem to some adjusters and some contractors. We see it in medical practice ever day. We dont see it as much in GC's doing structural work. The water and smoke contractors are the worst offenders .

When these type claims were reduced to SF, SY, EA. LG. SM. MIN. This is when the fox,s moved into the chicken house with the biddies.

Go back to time and material cost with a clerk of the works  watching ever move of the contractor.

and ever concerned party would get a fair product for a fair price.

When was the last time an insured ask you, If I had know what they charged and what you would have paid I would have contracted it my self ?    How did you answer that question ?

An insurance company would save about 200% of the cost of a major fire loss or water loss in the $50,000.  up catagory by using the clerk of the works method supervised by the adjuster and billing the carrier direct instead of the unit price/data base method.

This is not to start an argument amoung adjusters and contractors who disagree but I was involved with 2 losses as described that had a construction consult because the first reserve dictated one. We did not use unit prices and this was the result. All parties satisfied.

Ray,

You have got it started now, all the car washers will be calling all the venders and asking for clerk assignemnts. hehehehehe


David Houtz

Its really becoming a new niche industry. The person we used was a handi-man type who did small jobs for realtors to get houses ready to sell or pass inspection. We paid him $360.00 for a 12 hour day to log in "cleaners and log them out" and to walk around taking note. The sub who furnished the "cleaners" got them to the job and charged $14.00 per hour.

This fire loss went from the first days talk of $400,000.00 from the big 4 or 5 restoration contractors "just for the building" not contents,  to $184,000.00.