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A.L.E (alternate living expense): Sleep safely, after a small fire

hotel
You are entitled to be kept safe in a clean environment, that’s what insurance is for, we say you use it.

you are entitled to be kept safe in a clean environment

You are entitled to be kept safe in a clean environment, that’s what insurance is Yes, we have encountered this situation many times, people choosing to sleep in a house after a small fire or major smoke condition like a puff back. Even when some clients become aware that their insurance coverage would pay for all the cleaning and the policy likely has A.L.E (alternate living expense) coverage that would reimburse them for housing costs. Even when presented with this information, they still choose to stay. Yes, you are entitled to be kept safe in a clean environment, that’s what insurance is for, we say you use it.

We explain the inhalation risks of toxic smoke particles in the air that can’t be seen and that they will be breathing in. These particles, not visible to the naked, eye will remain airborne for up to a week or more. We show them that all surfaces, textiles (soft goods like blankets, drapes & clothes) clearly smell and should all be cleaned immediately so that more toxic smoke particles don’t become airborne when these items are moved or used. In addition, wearing clothing that has toxic smoke particles absorbed into them creates a pathway for intrusion into your body through absorption by physical contact on bare skin. Smoke will penetrate the interior portions of cabinets & closets exposing their food, cups, dishes, etc. During intense smoke conditions even the interior of refrigerators will show signs of smoke intrusion.

A.L.E (alternate living expense) will keep you safe so you don't breath in toxic smoke particles
Don’t expose your family to the risks of toxic smoke particles, A.L.E will cover the costs to stay someplace safe.

Why stay in a toxic environment?

What really makes us scratch our heads is why would anyone expose themselves & their family (pets included) to these hazards when their insurance policy would likely cover all of the necessary cleaning & air filtering to make their home safe? Yes, it will be inconvenient and you might actually have to move out but if you have ALE, there is no cost. Plus, accessing ALE will give you two additional benefits. The first benefit is your insurance carrier will expedite the processing & paying of this claim so they can minimize the ALE costs. The second benefit in moving out is that it will give your smoke damage cleanup contractor full access to clean every square inch of your home with a large crew which should make the project go much quicker.

Use your A.L.E (alternate living expense), stay safe.

With all the above said, wouldn’t anyone & everyone want their project to go quicker? Who would knowingly expose their family to dangerous carcinogens so their insurance carrier could save money?

For more damage restoration related blogs, please visit our website at https://truerestorations.com/blog
The True Restorations Team

 

 

Delayed Coverage Determinations

Burst pipes from a deep freeze, soot damage from an oil burner puff back or a flooded basement from a hot water heater relief valve failure, these are all typical conditions that are covered under just about every general liability policy. When these types of claims are called in, you will typically get a positive coverage determination directly from your insurance carriers claim intake coordinator. But when conditions aren’t so cut & dry, or the source of the condition is not definitively known, that uncertainty is usually met with a delayed coverage determination. These delays in having a clear coverage determination place an insured in a precarious state on whether to move forward with cleanup paying out of pocket or with waiting an undetermined length of time for a coverage answer

Rapid water removal & dehumidification is key

water restoration company
Delayed coverage determinations can cause bigger issues, including harmful bacterial growth

Most every insurance policy will contain language which obligates an insured to expeditiously mitigate the condition to prevent additional damages, which is to help minimize the financial cost to the carrier. When there is a substantial water leak, water can soak up deeper into furniture, wick up higher & higher into interior & exterior walls and quickly lead to harmful bacterial growth. When conditions are optimal, dangerous mold growth can occur rapidly, sometimes within 48-72 hours, for this reason, rapid water removal & de-humidification is needed.

 

Delayed Coverage Determinations can cause more damage

With a typical covered loss, an established, reputable water mitigation company will provide emergency water cleanup services “on credit”, the same day. They can complete the cleanup & bill the cost of their services to the carrier. They know that it’s very difficult to determine the full extent of the damages on the initial assessment. Often there will be multiple layers of flooring encountered or other types of unusual conditions that necessitate additional labor. With a covered loss determination whatever scope of work that is needed to provide the proper cleanup to accepted cleaning industry standards will be paid by the carrier assuming proper documentation can be made. When there is a delay in coverage determination the insured is placed in a precarious situation in choosing to hire a contractor under the same arrangement as mentioned above or wait for a coverage answer and risk a sticky situation with the carrier for not mitigating damages expeditiously.

The typical insured most often waits for a coverage determination which can take a week or more. The timeline for the determination looks mostly like this. A claim is started with no coverage determination and a field adjuster is assigned and will call with 24-48 hours to set an appointment for a visit to the site. The field adjuster comes within a day or two and takes pictures, looks for the cause/source and interrogates the insured as to what they saw, know and did. Then the adjuster presents the findings in a report to the carriers’ desk adjuster who will make a coverage determination. One week wait for an answer would be quick if you can get it, now what happens?

What typically happens next yet mostly depends on the type of insured we are dealing with. Waiting a week or more seems quite risky and likely very disruptive to the dwelling for as the more days go by, the smell can become extremely foul. The DIY type will just grab their shop vac to suck up the water and then set up a couple of typical house fans to hypothetically “Dry” the space out. Sounds good, right? In reality it didn’t actually do much, in fact it likely made the situation worse. How’s that you ask? Blowing air on wet surfaces makes the moisture absorb into the air causing the whole space and every surface within it to be in a high moisture environment exposing everything to additional damages from moisture. Without substantial, simultaneous de-humidification this is the worst thing you could do. Your carrier will be ecstatic if you do this as they will have likely saved a boatload of money not having to pay a professional water damage restoration contractor for the “proper cleanup”. Please don’t do this. Read the Do’s & Don’ts on water damage here.

The smarter choice: A Restoration Contractor

Starting the cleanup process ASAP prior to hearing back on your delayed coverage determination

Delayed Coverage Determinations, chose a restoration contractorAnother approach would be to hire a water damage restoration contractor and pay out of pocket. Assuming your loss has coverage, you could submit your paid invoice to the carrier for reimbursement. We suggest that when faced with a “no coverage” determination scenario you use your restoration contractor as a liaison in a consulting capacity to help push the decision process along. This contractor will likely know the adjusters well as they have interacted with them on many other claims throughout the year(s), plus they would much rather work through the carrier under the accepted rules of not having to firmly commit to a scope of work due to unforeseen damages. The typical out of pocket job for an insured will most likely be a firm price and when unforeseen damages are found it creates an uncomfortable situation with an already frustrated insured.

We have been seeing the “no coverage determination” scenario more often as of late. The reason could be a money saving scheme by the carriers or it could be due to inexperienced claims reps or short staffed claims departments. Whatever the reason we hope this information helps you make a more informed decision if faced with this issue.

For more on restoration related topics, please visit our website at www.truerestorations.com
The True Restorations Team

Call a Plumber first for pipe burst?

Should you call a plumber first for a pipe burst in your home or business? You can’t go wrong with that, agreed, but you can probably do better. What if you called a “full-service” water damage restoration contractor first? This type of contractor can not only fix the burst pipe but can also assist you with starting an insurance claim, can perform immediate cleanup on credit, can help you with damaged contents, can provide cleaning and storage of salvageable contents, can assist you in a consulting capacity to settle your repair payout & can provide full repairs services for the exact insurance payout and can also coordinate any specialty service needed, wouldn’t that be a better first call?

plumber

Plumber


Fix the burst pipe

full service restoration contractor

Restoration Contractor


Fix the burst pipe
Assist you with starting claim
Immediate cleanup on credit
Assist with damaged contents
Provide cleaning & storage of salvageable contents
Assist you in settling your repair payout
Provide full repairs services
Coordinate any specialty service needed

Call a full service restoration contractor, the best “first call” that you could make

If your home or business is affected by water, smoke, fire or mold and you are in need of emergency assistance, a full-service restoration contractor would be the best “first call” that you could make. These contractors have vast experience in handling every need that arises from these conditions. Their insurance claims experience is invaluable from the start. They can expertly convey the site conditions & cause of the loss to the claims department when the claim is first filed. Many policyholders don’t realize that saying the wrong thing to an insurance carriers claim intake representative can cause their claim to be denied. Additionally, having a plumber come in first to do an emergency repair and not having the plumbers invoice prepared properly can end up costing the unwitting owner a bunch of money that should normally be reimbursed. An experienced restoration contractor would have a plumbers invoice prepared to show one cost for the actual pipe repair and a second invoice or line item for the cost to access the damaged pipe including cleanup costs. Invoicing like this is better because typically the demolition & cleanup needed to access the pipe is reimbursed whereas the pipe repair is not.

Save yourself time, money & aggravation when you chose a restoration contractor

Another reason to call a restoration contractor first is to enjoy a seamless, time saving advantage in having the pipe repaired and cleanup started as soon as the pipe is repaired, often times with both being done simultaneously. The full-service water damage restoration contractors’ services will also expedite all other aspects of the job through completion with net savings of time that could add up to weeks, if not months. Wouldn’t everyone want their home or business fully fixed back to the way it was quicker & with much, much less time, effort & aggravation in coordinating multiple contractors? We think so and so do all of our clients.

For more info on similar damage restoration topics, please visit our blog on our website https://truerestorations.com/blog/
The True Restorations Team

 

The Right To Choose

Claims Steering, trying to chose between a preferred contractor or independentMany of the major insurance carriers don’t promote the fact that their “insureds”, aka policyholders, have the right to choose ANY emergency cleanup / restoration contractor they wish. They will offer a contractor one or two or three from their “preferred vendor” list which I suppose creates the appearance of having a choice. The hard fact is, you can choose any contractor, vendor or supplier to work with, whether on their preferred list or not. Now that sounds like a real Right to Choose doesn’t it?

“Claims steering” is an illegal practice

The claims adjusters from these same carriers will actually hint or strongly suggest to their clients that they should only work with a preferred vendor, this is called “claims steering” and that practice is illegal. Most every restoration contractor who has had jobs stolen from them by these unscrupulous adjusters can share these same stories. Unsuspecting insureds are told falsehoods like “If you work with that contractor, we might not be able to reimburse you for all the costs” or “That contractor you signed with is not on our vendor list”. Both statements, though not actual claims steering are still highly manipulative at best and done to sow seeds of doubt in you contractor selection. Claims steering…”so what”, you might say, or “I’d rather work with one of their contractors, so I don’t have any issues”. Here are a few things to consider before you decide if this is a big deal or not.

The main difference between a preferred vendor & an independent contractor

man giving estimate for insurance claim
The independent contractor is not encumbered by this relationship and can advocate for the client with no fear of losing any future job leads.

The main difference between a preferred vendor & an independent contractor is on who’s side the contractor will advocate for, you or the carrier. If the contractor is brought in by the carrier as a preferred vendor, that contractor needs to be a bit more compliant to maintain a happy relationship to keep future job leads keep coming in. That vendor is beholden to his preferred vendor relationship & the rules that govern that relationship… and you can bet there are rules, and the rules favor you know who. The independent contractor is not encumbered by this relationship and can advocate for the client with no fear of losing any future job leads.

Do you really feel comfortable working with a preferred vendor?

If you talk to any one of these preferred vendor contractors, they will tell you story after story about getting screwed by the carriers under this relationship. They will say, “they cut my invoice & won’t pay for this and we’re not allowed to charge for that”. In short, the contractor either must do certain work for free or maybe be tempted to cut corners to make up for the expected billing shortfall. So why would any contractor be a preferred vendor you may ask? Many of the major national franchises have an obligation to work with these carriers for one. Secondly, volume of work can make the billing shortfalls a bit more palatable for these preferred vendors. Let’s spin it around, do you really feel comfortable working with a preferred vendor?

Owners GroupAt True Restorations, we pride ourselves on client advocacy

Our company operates as an independent contractor, we pride ourselves on client advocacy. We have very few issues performing emergency work, getting approvals & getting paid the correct amount from the carrier. We explain the whole claims process to our clients, obtain a signed “Right to Choose”, a “Service Authorization” and a signed “Direction of Payment” documents before any work is even started. The main reason we can operate independently and be assured that everything will work out is due to the written & agreed “industry standards” developed by other independent groups (IICRC) working in concert with the carriers. The agreed values of services, including actual work (labor), materials, equipment usage, etc. are delineated line items contained within an estimating software called Xactimate. The delineated written standards coupled with the corresponding estimating line items make the contractor playing field level for all. Whether you’re a preferred or independent vendor or a claims adjuster, all use the same database to come up with an agreed acceptable scope of work and value for the same using this system.

Hopefully this helps better explain what your right to choose means and why you don’t need approval from anyone to make your own decision on who will work on your insurance claim. When an emergency cleanup condition arises for you, a neighbor, a friend or loved one, please pass along this valuable information as a resource when making decisions & commitments on whom to hire. For more valuable information on water, smoke, fire & mold emergency cleanups, please visit our blog on our website at https://truerestorations.com/blog/
Kind Regards,
The True Restorations Team

People Involved in an insurance claim


insurance claimUnderstanding and remembering all the people who may be involved in your claim can be daunting and exhausting to remember. The larger the job, the more participants, that’s a given. Another factor is the type of emergency it is and what was affected (structure, contents, ability to live at the home, etc.). We will list the potential participants and what their area of involvement is on your typical homeowner’s insurance claim.

 

Insurance Agent

An insurance agent is a person who likely assisted you in securing the insurance policy that you currently have. They are often affiliated with one or more carriers but are not involved in the insurance claim, other than to help you start the claim & be an advocate for you to help work through any difficulties in the process. Some agents do not get involved in the claim at all, they will direct you to the “claims department” for all your answers & assistance from preferred vendors of the insurance carrier who will do the work. While others will value having their own list of local preferred vendors that tend to be much more service-oriented. This second type of agent knows very well that making sure the claim is handled well could mean the difference between having a long term renewal with this affected insured or losing them as a repeat customer due to a mishandled cleanup & repair by a vendor they know nothing about and no influence over.

Insurance Field Adjuster(s)

An insurance Field adjuster is someone who investigates the actual site to gather information. They take pictures and measurements of the affected finishes and interact with you and whomever the contractors that are working on your claim. They do the actual estimates and or critique the estimates given by your contractors. These estimates for cleanup, repairs & content damage are done using an industry-standard pricing database. Once the estimate of damages is completed they are passed off to the desk adjuster for final approval & payout.

In some cases, like large loss jobs, there may be additional field adjusters for each portion of your claim (mitigation, repairs, contents). The best practice is to gather all the adjuster’s business cards & keep track of which aspect they are assigned to find out their individual process.

Insurance Desk Adjuster

This is the main insurance carrier adjuster that will make the decisions on your claim. Occasionally, this desk adjuster will do the field adjusting as well. They mostly rely on the field adjusters’ visit notes & pictures and/or the equivalent from your restoration contractor. If the claim is dragging along or you have a money question, seek this individual out for a direct answer or intervention.

Emergency Mitigation Company, a.k.a. Restoration Company

An Emergency Mitigation Service Company is a uniquely licensed, insured & specifically trained entity that not only performs the emergency mitigation service (a.k.a. EMS, or cleanup) but also can assist in starting & processing an insurance claim for an insured. They are more often the 1st on scene and are the ones that are relied on to do a quick intervention to minimize the damages & keep the loss to the carrier at a minimum.

  • Applying industry standard cleanup

    These companies apply the industry standards for cleanup & mitigation developed and approved by the insurance carriers. Once a claim is started, these companies will seek approvals from the carrier’s claims department on an agreed scope of work based on the existing condition & will apply the industry-standard cleanup services. Often, the only requirement is pictures of proof as a justification for the scope of work, knowing this, the experienced restoration company can move rapidly on your cleanup.

    Invoicing out at the agreed industry rate

    The most unique aspect of their work is that they don’t estimate, they perform the work and document the quantities after the fact & invoice out at the agreed industry rate. The carriers are totally fine with this arrangement as they realize that taking estimates and waiting for those estimates to be evaluated and approved create delays and those delays will likely cause additional damages necessitating higher claims payout costs.

    Restoration work starts immediately

    These restoration companies typically perform all the cleanup work “on credit” and await payment from the carrier. They will ask the insured to sign a service authorization that has language in the agreement that directs the carrier to pay the restoration contractor directly for services rendered. This agreement coupled with the ability to invoice out the services rendered at the agreed rate enables the restoration company to begin work immediately with confidence that an acceptable payment will be received.

Restoration Repair Contractor

Sometimes, this company will be the same as the mitigation company and can handle other parts of your claim like contents cleaning & offsite storage.

You don’t necessarily even need a repair contractor as you can do the work yourself. There are however several advantages to working with one in terms of settling your claim & receiving the correct repair payout much quicker than when they aren’t involved in the process. Having a restoration contractor who also is experienced in the industry standards and is willing to do a competitive estimate on your behalf will not only be valuable in terms of net dollars for your repair; but will dramatically speed up the process of settling your claim with the carriers’ adjusters.

  • The benefits of a restoration contractor

    Some restoration contractors will seek a fee for this estimating & claims settling consulting service. This should be considered as valuable if you are looking to save time & aggravation. To come to an agreed repairs payout entails meeting with your field adjuster onsite, field measuring the affected structure for application into a CAD based estimating software (Xactimate) for a super elaborate insurance estimate. They will also have many email & phone exchanges with the adjusters leading toward an agreed scope of work to bring your structure back to “pre-loss” condition with like, kind & quality items. The real value a restoration contractor provides is their understanding of the software and how to apply it to the real-life condition of doing the repair work. Another benefit of having an experienced insurance restoration contractor on your team is the fact that most adjusters (field & desk type) don’t have the necessary construction knowledge and little to no construction experience to diagnose intricate repair costs. Their lack of experience often leads to insufficient payouts with lengthy, time-consuming supplemental approvals.

    Using a general contractor

    Another repair contractor can be a typical general contractor or home improvement contractor. Though they possess the skillset & knowledge to do all the repair work needed, they do tend to fall short in terms of estimating the costs of the repairs. Most typical contractors (99 % of them) don’t possess the access to the insurance estimating database & will provide you a very vague estimate that an insurance adjuster will struggle approving. When their estimated value of repairs is more than the Xactimate database estimate generates there will likely be long delays in settling the claim which frustrates the adjusters and causes them a lot of extra work.

Vendor Program /Third Party Administrator (a.k.a. TPA)

Smaller insurance carriers and even some of the major carriers will utilize the services of a TPA as a claim’s administrator. These TPA’s supplant the carriers claims department field adjusters. They also have their own list of preferred vendors. TPA’s have very stringent requirements for response times & timely communications of project development & advancement. They also are empowered to scrutinize vendor bills prior to carrier payment processing & will consult with the carriers’ desk adjusters on scope of work approvals.

Independent Adjusters (IA) / Public Adjuster (PA)

As if all of this wasn’t confusing enough, here are a few more individuals that you may or may not have involved in your claim. The first type is an independent adjuster (a.k.a. IA). Just like their name says, they are independent, meaning, they operate in a special capacity as the carriers’ field adjuster. They are impartial and may work for many different carriers. You will often encounter IA’s during a “surge event” or catastrophe type (major storm, flood, etc.) and you might hear them referred to as “cat adjusters”. These adjusters often are storm chasers that get brought to the local region to help assist in the multitude of claims that are occurring. These same IA’s, when not involved with a cat event, may also work for restoration contractors as an estimator. The restoration contractors like to utilize their services because they know the IA’s have intimate knowledge as to what the carriers are willing to pay for & how to present the information with the least amount of pushback.

The public adjuster

The next type to discuss is the public adjuster (PA). The term PA is kind of a curse word to the insurance carrier & insurance agents. These adjusters work exclusively for the insured in a special capacity as a claim negotiator. They are licensed to take over a claim & replace the insured as the point of contact & decision-maker on the claim. The PA typically will have a lot of insurance claims adjusting experience & will battle the carrier tooth & nail for the biggest payout on all aspects of the claim. They sell their services to the insureds with the promise of a huge payout. To get this huge hypothetical payout they will most likely drag out the process battling back & forth in the hopes of wearing down the adjusters. They are not hard to find if you have a large loss fire, they will be the guys standing in the street with clipboards & fancy printed marketing folders. They often are out front while the fire department is still dousing the flames on your home. They are not for altruistic reasons like helping you in your time of need, their main motivation is getting “PAID” for their services with fees as high as 8-10% of your total insurance payout. They often have intimate relations with board up companies who are motivated through referral fees to funnel business their way. Once hired by an unwitting insured, they often bring their own “preferred” vendors in to do the work collecting even more “referral” fees from these bottom basement subcontractors. Most restoration contractors, insurance agents and adjusters have a negative experience in dealing with these PA’s. We believe that a full-service restoration contractor (mitigation & repair) that also has vast construction knowledge & intimate knowledge of the Xactimate estimating software will get the same payout that an PA. We at True Restorations charge NO COST for this estimating & consulting service assuming we perform the work for you at the agreed Xactimate values.

We hope this information has helped you understand all the different people involved in your insurance claim.  To learn more about insurance claims read our blog post, “Homeowners insurance claim payout FAQ’s“.

Kind Regards
The True Restorations Team

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

 

 

To hire a Public Adjuster or Not???

public adjusterA public adjuster is a professional claims handler who advocates for the policyholder in appraising and negotiating a claimant’s insurance claim, the need to hire a public adjuster is a tough decision for any homeowner who is faced with negotiating a claim like a major fire. Who wouldn’t want an advocate, especially when it pertains to dealing and negotiating with and insurance company. Insurance companies are in the business of collecting money, not paying it out….right? I suppose if their fees where reasonable the answer would be kind of simple but the reality is that they often charge a hefty percentage of the overall payout given to a homeowner. The unknowing homeowner who hired a public adjuster to advocate for them didn’t just hire an advocate, they also hired a “middle man”, and middle men get their cut of the action.

Advocating on behalf of the client sounds like such an altruistic endeavor, it’s not quite like that though. The public adjusters job is to maximize a homeowners payout and to access a portion of the maxed out payout monies to his / her benefit, and I don’t have a problem with that, that’s sounds like a great business practice. A restoration contractor does exactly the same thing. When a loss occurs the restoration contractor will generate a proposal for the repairs and then compare their proposal to the adjusters from the insurance company. The restoration contractor will be working off the same database used by the insurance adjustors (Xactimate restoration software) and will also have the advantage of advanced, intimate construction knowledge & industry standard pricing of labor & materials, whereas a public adjuster may have no contracting experience. More importantly, the public adjuster (the middle man) will be soaking up funds that might otherwise have went to the actual people rebuilding the structure (the restoration contractor). Who would you like rebuilding your house, a contractor that was making a nice wage or a contractor who is working super cheap because the middle man took a really nice chunk for himself? Do the best contractors work super cheap? Do the super cheap contractors take the necessary time to do the right job or do they cut corners and overlook things so they can finish faster? I could rest my case on that note alone!!!!

It can actually get worse, some public adjusters will get involved in guiding the homeowner to certain contractors for the rebuilding process, which sounds helpful, right? Well once you understand what happens next, you might not think so. The unscrupulous public adjuster, can, and often times does, dole out work in exchange for hefty kickbacks from contractors that they line up to do the repairs. If you have ever been at a fire scene, and I have been at hundreds of them as a NYC firefighter for 20 years, just about every fire brings a parade of public adjusters, all of them lined up in front of the building drooling at the prospect of securing an easy payday as the “middle man”, and this occurs before the fire is even fully extinguished. This is no joke.

I will leave you with one bit of logical advice and it’s a reiteration of a point brought up previously but worth stating again. If you are willing to compensate someone for advocating on your behalf let it be the individual / company that would be rebuilding your home for you (a restoration contractor), not a middle man.

Kevin Bevilacqua
President True Restorations, Inc.

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