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How to Prevent a Costly Mold Cleanup

Water damage restoration contractors come across this scenario often, especially during the spring & summer seasons as temperatures heat up. The way to accomplish turning a $5K water job into a $20K mold job is as follows…

First, at a minimum, you will need a substantial onetime water condition like a flooded basement from a burst pipe or a defective boiler in a typical residential home or commercial structure. Multiple water leak events or continual slow leak conditions make your chances much more likely to achieve this award. The second most critical aspect is to do an improper water mitigation & de-humidification. That is all you need, wasn’t that easy???

All kidding aside, the above is accurate and not exactly funny if you are the owner of the dwelling or space. Whenever we restoration contractors hear stories about a previous leak or leaks, our ears perk up. We immediately look for the tell-tale signs of mold growth, like black mold behind the base moldings or door casings. Seeing some visible mold growth in these spots are like seeing the tip of an iceberg. There is likely a large area of mold growth on the back side of the sheetrock, out of view, which is the real concern and often very difficult to determine how bad & far reaching the growth is.

In NYS there are strict mold testing & remediation guidelines. Only a NYS licensed mold testing companies can legally test for the presence of dangerous levels of mold. They are also the only company type that can confirm with post testing that a successful mold remediation was done. NYS guidelines also state that only a licensed mold remediation contractor can perform the necessary mold removal & mold cleaning protocols as outlined by the testing company. Further stated in the NYS guidelines, the remediation company cannot do the testing & the testing company cannot perform the remediation on the same project.

Hidden Mold
It’s the mold you cant see in between the walls, that is the major concern.

The mold remediation process is detailed, time consuming & very costly. Take some advice from a pro, DO NOT attempt to cleanup & dehumidify a large water condition on your own, without the proper equipment & know how. Most homeowners think they can turn on a few small fans & tiny dehumidifiers to solve the problem. The reality is they likely only evaporated the visible standing water into the air which created an elevated moisture environment throughout the entire space. This simple act creates a perfect condition for unseen mold growth. You see how easy it is to make a simple water cleanup job into a very large & costly mold remediation project?

If you have a known, repeating water leak or continuous high moisture condition, as is common for many homes with basements on Long Island, you should act swiftly on neutralizing this condition ASAP.

If you or a friend has an emergency condition involving water or mold, the first call should be to a restoration contractor for a site visit for a complete, professional no cost evaluation & consultation. Please consider the information presented in this blog before making the decision to tackle a job like this on your own. For more information on other water, smoke, fire & mold restoration please visit our blog https://truerestorations.com/blog/

For more on mold, including the Do’s & Don’t s, please visit our site https://truerestorations.com/mold-damage-restoration/

Regards,

The True Restorations Team

Homeowners Insurance Claim Payout FAQ’s

man giving estimate for insurance claim
Auto check up and car service shop concept. Mechanic writing job checklist to clipboard to estimate repair quotation to client at workshop garage.

What are all those acronyms on the repair estimate, EMS, RCV, ACV, D&R, R&R, O&P?

EMS = Emergency mitigation service

RCV = recoverable cash value, which would be the total value of the labor & materials needed to repair and/or replace the exact same finished materials (a.k.a. like, kind & quality).

 ACV = actual cash value. This value is the amount of the initial repair payout, which is typically the RCV less the recoverable depreciation.

D&R = detach & reset. This Xactimate entry is used as a labor only entry for salvageable items that need to be removed / salvaged / and reset as a part of the repair process. Example: A vanity is being replaced but the sinktop & faucet would need to be salvaged & reinstalled on the new vanity cabinet.

R&R = Remove & replace. This Xactimate entry is used when an item is being entirely demolished & replaced with a new similar item of similar grade & composition.

O&P = Overhead & profit. This extra add-on is typically applied to Xactimate repair line item entries to compensate for having to hire a professional contractor to manage & coordinate the repair portion of your project. This multiplier is often left off repair estimates when homeowners try to “go it alone” without the assistance of an industry professional assisting in settling the claim.

Why is my insurance payout for the repairs so low?

Most likely your payout will be the ACV (actual cash value) less the amount of your deductible. Example, the RCV (recoverable cash value) on your repair payout is $10,000 and your ACV (actual cash value) is $8500, $1,500 is withheld and that is the recoverable depreciation. If you have a $1,000 deductible, your initial insurance repair payout will be $7,500. You can also get the $1,500 from your insurance carrier under certain conditions.

What is recoverable depreciation & how can I get that money reimbursed?

Typically, If you can show your insurance carrier receipts for any supplies you paid for directly along with paid invoices to your contractor that add up to the RCVvalue (or greater) than you would qualify to get reimbursed the recoverable depreciation…..or…….you may be able to have the carrier release the recoverable depreciation once you have a signed contract with a contractor equal to the RCV.

What if I want to do some or all of the work, are there any advantages or disadvantages to doing this, can I still get the recoverable depreciation?

Your carrier would LOVE for you to do this, as the deck is stacked in their favor if you go that direction. The same rules would apply regarding showing paid receipts totaling the RCV value in order to get the recoverable depreciation, which won’t really be possible if you provide your own labor. Plus, the adjuster will likely not afford you overhead & profit (O&P) which will drastically reduce your payout as you are not a contractor with overhead or profit concerns.

Why can’t my contractor do all the repair work and wait to get paid from my insurance carrier like they do on the EMS side?

Collections on the EMS portion of your claim, though it takes a lot of time & delays, the carriers will often cut a check directly to your contractor as a sole payee, which is proper due to the fact that the signed service authorization states those particulars, plus….all the work has been completed. The emergency work is handled this way because the scope of work is unknown and providing an estimate often takes time, additional time typically causes more damage. Your insurance carrier prefers to have the emergency work commence immediately to minimize the damages and is prepared to be billed directly from the restoration contractor. With a signed direction of payment from you (aka: DOP), that document instructs the carrier to pay the emergency cleanup contractor directly for the EMS work.

On the repair side most contractors don’t offer credit terms on repair work as they are  not a bank or a lending institution. This is mainly due to the insurance carrier’s unwillingness to guarantee unencumbered payments directly to the contractor. They’re  policy is to put additional parties on the checks (mortgage companies). Your mortgager would have the legal right to the funds if there are delinquencies, which creates an untenable situation for a contractor.

We hope this information helps you understand your confusing insurance claim. Thank you for taking the time to read this & please peruse our blog for other helpful posts related to emergency cleanups & repairs.

The True Restorations Team

 

 

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