What Do You Do In Case Of Emergency Damage

As IICRC licensed Water Damage Restoration and Applied Structural Drying experts, we are bound to follow the processes and recommendations set forth in the IICRC S500. The S500 is the ANSI standard and a set of Best Practices that most reputable mitigation companies and insurance companies follow to define scope of work for each mitigation effort. For dry out and mitigation work, we have an obligation to follow the standards to ensure a complete and safe dry out and to minimize the risk of additional damage occurring. This will often require removal or carpet, pad and flooring, removal of trim, removal of drywall and insulation, etc, and the placement of dehumidification and drying equipment. Although we can work with the customer to some degree on the scope of work to accommodate unique situations, we always default to the proper industry standard for drying. We have more flexibility in what gets done during the reconstruction phase, and as long as the lien holders are satisfied the property has been put back to pre-loss conditions, we can work with the homeowner on scope of work before the reconstruction project begins.

Our rates are not necessarily set by us. They are predetermined by the insurance industry. We use a tool called Xactimate to prepare our estimates, which in turn downloads the rates for use in all calculations. The Xactimate tool and associated rate tables are the same ones used by the insurance company adjusters. The insurance company sets the rates, we do not. 

Since we, as an Emergency Services company, use the same definition of scope and same rate tables as the Insurance Company, the amount awarded to the homeowner should be very close to what is charged to restore the property. There may be some small differences due to either the Insurance company or Restoration company missing something in the estimate, but those differences can usually be worked out between the two as part of the scope approval process.  Other factors that would cause a difference between our bill and the approved amount from the Insurance company would be deductibles and policy limits. Unfortunately, these items need to be discussed between the property owner and Insurance Agent prior to a loss occurring. 

Pricing works a little different for mitigation than it does for reconstruction or contents. On most occasions, it is virtually impossible to determine the complete scope of work for a cleanup or mitigation effort by merely looking at the damage before the work begins. Water may have intruded wall cavities, carpet padding may have been damaged, insultation behind walls may have become wet, etc. Because of this, we typically use a Work Authorization that allows us to begin the cleanup effort and work with the Insurance Adjuster to determine actual cost after the work has been begun. Reconstruction is a bit different in that we will typically work with the Adjuster to determine required scope and cost before an actual contract is signed. 

In general, think of mitigation effort in the same way you would view an emergency room or hospital visit. When you go to an emergency room, the doctor and insurance company negotiate rates. The Doctor typically accepts what the insurance company pays, and the patient is only responsible for the deductible (or co-pay).

For reconstruction work, sure. But since this is still an insurance job, we recommend choosing a company familiar with working with insurance companies and their processes.  

Sometimes, an Agent may recommend or a homeowner may seek out two or three competitive bids for mitigation and go with the least expensive. This advice is usually given by someone who is not familiar with the Emergency Services Claims Process or someone who mistakenly thinks that because the Agent gave them three referrals, it means they should get three bids (Often times an Agent will give multiple referrals to avoid any conflict of interest situations).  We advise against getting bids for Mitigation work and advise customers to choose a company based on their expertise and competence. A reputable emergency services company has the tools, training and methods to do the job properly and will always work off of a scope and pricing model negotiated with the insurance company. What this means to the homeowner is that, except for the deductible, they will not need to take any money out of pocket to get the highest quality work available. In going with the cheapest bid, the home owner may open himself up to substandard work (not knowing proper mitigation methods) or additional costs for items that come up during the project (a restoration company knows how to go back for supplements and negotiate changes with the insurance company) and will only receive the amount actually charged by the company from the insurance company. Insurance companies want the job done correctly and want happy customers. Choose the most competent company rather than the cheapest as it will make no difference to your pocketbook. 

Using the emergency room example, you would not drive to three different hospitals to get a quote on a broken arm or heart attack. You go to the place you feel is best equipped to take care of you and let the hospital and insurance company work things out financially.

Insurance Policies are complicated instruments and have many different riders, exclusions, limitations, etc. It is best to always confer with your Agent and or written policy to answer specific questions on coverage and process. In general, if the event that caused the loss to the covered structure was sudden and accidental (a single event like a storm), it is generally covered. Things that occur over time or is a result of neglect or  lack of maintenance, typically are not covered. Other things that are covered only if specific riders exist such as sewer backup, code upgrades, etc.  It is important to note that coverage can be limited by deductibles, policy limits, etc. These are all items that you should discuss with your Agent and be familiar with. Don’t skimp on coverage. I can’t tell you how many people tell us the have the “Cadillac” insurance policy only to find out that they declined the specific coverage that would have helped them. 

If it is determined that a loss is covered, it is both Phoenix Restoration and the insurance company's responsibility is in indemnification, or simply stated, putting the structure back to pre-loss conditions. Unfortunately, no provisions are given for pain and suffering, inconvenience, etc. As a homeowner, you are not allowed to financially benefit from an insurance loss. There is no money for you to keep in a claim. The claim proceeds are used to put the house back together more or less the way it was before the loss. With few exceptions (like living expenses for a total loss fire), if the insurance company issues a check, it is for services that have been or will be required to repair the loss. On larger claims a homeowner’s hands are partially tied in that a bank, mortgage company or other lien holder will often demand their name on the check and do an inspection to make sure the property is put back to similar condition.

Working with an Emergency Services Company will typically cost more than if the property owner manages the process himself for the following reasons:

1. Emergency Services companies have hundreds of thousands of dollars in very expensive drying and construction equipment that sits in a warehouse, idle, not making money most of the time. We have to provide secure storage for that equipment, maintain it, provide transportation for it if it is needed, and make sure there is enough of it, etc for when a flood or catastrophe hits. 
2. Emergency Services companies have trained, certified staff that understands how to dry a structure safely and completely, minimizing the risk of secondary damage such as mold.
3. We respond when you need us, 24/7. We need to pay our certified technicians better than average so they will get up in the middle of the night to dry and clean a structure that has suffered a loss resulting from raw sewage.  
4. We work with your Agent and your Insurance Company. We know how the process works and are there to assist you in navigating that process. We can often get more done for you, legitimately, by having us work with the adjuster, than an unfamiliar homeowner going directly. Insurance companies also want to work with trustworthy, competent (and yes more expensive) professionals. Better service means happier customers who will be less likely to leave and go somewhere else. Also, keep in mind that an Insurance Adjuster will almost always pay a Property Owner less if he knows that the work will be done by the Property Owner. They are in business to make money and realize that if the Property Owner is willing to do some of the work himself and is not a qualified emergency services company, they can save money and pay less.

Again using the Hospital analogy, they have the training, experience, equipment and medicines needed to handle most emergencies on hand at all times. There is a cost associated with this and it is not inexpensive. You don’t want a pharmacist performing heart surgery on you and you don’t want a Handyman cleaning sewage out of your finished basement.

As you can imagine, it depends. A typical mitigation effort can take between 3-4 days. Typically, any removal of wet contents and materials and any demolition takes place. Also on the first day, drying equipment is put in place. The drying equipment will typically run for about three days, during which someone will typically come out to do moisture readings to see how well the property is drying out. At this point the structure is considered safe, preparations can be made for reconstruction. 

A larger water loss, fire, or reconstruction effort takes significantly longer based on size, complexity, type of damage and amount of contents. Your project manager will be able to provide a rough estimate upon initial inspection. As a Professional Restoration company, we work with your insurance company to complete repairs within the time allotted for ALE (Alternate Living Expenses) in cases where homeowners must relocate while repairs are taking place.

Sure, but we caution against it. Often times, a homeowner may attempt to keep all or part of the money by not completing repairs and pocketing the money. This is a flawed approach for a number of reasons: First, the homeowner will not be entitled to any RCV (Recoverable Depreciation) or PWI (Pay When Incurred) money unless they can prove they paid to have the items replaced or repaired. Second, in keeping with the concepts of indemnification and the concept that insurance is not meant to provide a financial gain, the insurance company will pay a homeowner far less than a restoration company for self-performed work and may demand that unused funds be returned. Lastly, one thing many homeowners do not realize is that when you purchase an insurance policy in Illinois, there is language in your policy the obligates you to take reasonable steps to prevent further damage from occurring. Hiring a professional restoration company greatly reduces the risk of collateral damage from occurring from microbial growth (mold) or other causes. Note: preventable collateral damage is NOT covered by the insurance company.

In most cases, yes, when it is convenient and safe. Because of smoke contamination and unsafe structural concerns, many fires and major floods will require the family to move out temporarily. Many policies provide for ALE or Alternate Living Expenses for food, lodging, and clothing during these times. Most back-ups, flooded basements, exterior work, etc will not require the family to move out.

You certainly reserve the right to appeal the decision. Having an experienced Restoration Contractor may be valuable in helping the Insurance Company understand why a legitimate claim should be allowed. 

If ultimately it is determined for whatever reason the work is not covered, we can work with the homeowner to provide a quote for performing the required services.

Yes, absolutely. Homeowners often take the opportunity to do remodeling or other upgrades to their house during this time since the house is already under construction. Your Estimator will work with you to define scope and costs outside of the insurance estimate. It should also be noted that Phoenix Restoration has financing options often used for remodeling projects of this type as well as covering deductibles, upgrades and other non-insurance related expenses.