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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

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