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The insurance industry has been around for centuries and has committed significant resources to learning how to be a responsible steward of the premium dollars that they collect from policyholders, who for the purposes of this conversation are effectively members of a cooperative.

Whether the company is a publicly traded corporation, a private company or a true mutual, the idea is the same.  They collect money into a pool, the amount of which is based on the degree of risk or exposure that the policyholder brings to the collective by virtue of potential perils, or the value of the property being insured.  In turn, the insurer needs to be diligent about how that money is spent, as overspending costs all the shareholders in the pool more money or raises premiums.

The industry has always done a good job of controlling the spend on buildings.  There are lots of programs like Xactimate and Core Logic that specialize in this, and before them, similar programs like Marshall and Swift.  Even competitive bidding, provided the adjuster created a comprehensive scope, did a good job of ensuring that the cost of restoring property to its pre-loss condition was within acceptable values.

Property restoration also stands closely to its figurative cousin, new construction, the latter providing many skilled estimators to the insurance world.  Even the water restoration portion of most claims has the IICRC S500 to dictate what needs to be done, and it is not hard to establish what the value of that work should be.

The elephant in the room has always been contents restoration.  It might make up as much as 30% of a complete loss, but is poorly understood.  Most credible restoration companies do contents restoration, and there are many tools to make it faster and more effective.  Many adjusters, however, look at the bottom right-hand corner of the invoice and judge the contents restoration on that.

An example of how that judgement can be misleading, and it’s a true story, is one in which an insurer compared two companies on the cost of their contents restoration services.  Company A had a large warehouse, trucks, staff, and equipment.  In a large water loss they were able to restore about 50% of the contents in the home in our example.  Their invoice reflected all of the resources that they could bring to bear to restore as much as possible, and in addition the insurer only had to pay to replace the 50% of the contents that were not restorable.

Company B had a similar loss and rendered an account that was much less than what Company A had rendered.  Unfortunately in this case however, all of the contents had been disposed of by Company B, resulting in a much greater loss, as 100% of the contents had to be replaced, and at replacement cost.  Company B was considered to be the contents provider of choice.  Their invoices were much more reasonable because Company B did not have a contents department at all.  Because all they could do was throw everything out, their invoice was lower, but the overall cost to the insurer was much higher.

Today, most companies are somewhere in the gray scale between Company A and Company B.  As some insurers have been reluctant to pay for technology like ultrasonic cleaning and Esporta, fewer restoration companies are investing in them.  More work is being subcontracted and fewer restoration companies have the large storage facilities now that some insurers want in-house storage at no cost.   There is no right or wrong as to how each company is structured, but a prudent insurer needs to know to whom they are contracting their business.

So how do you know if you are being fooled by Company B, and paying far more because you have to replace so much?  How do you know if Company A is making bad decisions and spending more to restore it than the item is worth?

As with any worthwhile endeavor, this one takes some homework.  Quick questions before you start dealing with a company:

  • Do you have a contents department?  Where is it, and can I come see it?
  • What training do you provide to your contents staff?
  • What tools do you use for processing (Fireline, Esporta, Ozone, etc. Not having it is not necessarily bad if they have another economical way of dealing with restoration)
  • What tools do you use for contents listing/tracking? I-Cat and Encircle are good tools for making sure that you know what the company has handled and that they know where it is.


Once a claim has started, decisions need to be made early and it takes some time from your adjusting staff, who need to make decisions and agreements with the insured that the restoration company cannot:

  • Please make deals with the insured for food, spice cabinets, and anything else that is comprised of lots of low value items. They are expensive to list, pack, and transport and should be disposed of on site.  The restorer can’t make a deal with the insured, it takes the adjuster.
  • Technology is advancing at an unprecedented pace. It is hard to get customers to take back old electronics, so you need to decide if you want the restorer to store the electronics, assess them, or repair them.  They would rather know and not incur costs if you plan to write them off.
  • The best way to contain transportation and storage costs is to not move and store the goods at all. If non-restorable contents can be disposed on site, or contents can be stored on site somewhere, it saves a LOT of money.
  • Decide if other items like socks are worth cleaning or if you are best to just pay for new ones. Otherwise they are getting cleaned.


Contents restoration needs to be a cooperative process.  We are dealing with people’s possessions, and we have to get it right.  You will get good value for the dollar if you decide exactly what you want done before the work is done.  It is an adjusting decision, both to be sure that you have picked a company that can do what you need done, and what that might be.

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