In a 2011 article in Canadian Underwriter, Keith Edwards, then Senior V.P. of Training and Development for SCM Adjusters wrote an excellent article on how the basics of Adjusting remain as vital today as they were in his Grandfather’s time. As times change, the means by which Adjusters communicate have evolved, but the content and the service requirements remain the same. The ability to ask all the right questions and to faithfully convey them with recommendations is still the measure of a good Adjuster.
“An adjuster is in the communication business” Mr. Edwards wrote, “He or she collects, analyzes and reports information. Despite great changes in communications technology…nothing has changed.”
Similarly, restoration contractors need to ask all the right questions and provide the right answers to be a reliable member of the claims handling team. Whether it’s emergency services, reconstruction, or contents restoration, there are many potential outcomes and even more ways of getting there. Like the Adjuster, the restoration contractor should be defining requirements and options, and should offer alternatives for the Adjuster’s consideration. With all the options in hand, the Adjuster can ensure that the available policy funds are either expended judiciously or saved appropriately.
In emergency services, the options might include top down drying of carpet to avoid disruption of occupancy, and thereby reducing or eliminating ALE. Large water losses might be better dealt with by installing large thermal dryers instead of conventional dehumidifiers. Manipulating contents from room to room to facilitate work might be more economical than removing them and storing them elsewhere. A little overtime might be better than multiple trips. These are examples of considerations that should be discussed at the outset of the claim to ensure that we don’t just do it the way it has always been done, without exploring more efficient options.
Similarly, reconstruction can take many forms. If time is of the essence as it is when ALE or business interruption is running at a high daily cost, it might be preferable to proceed on a cost plus basis, either on an agreed price schedule, or with all subtrades double or triple bid. The most frustrating part of a claim for insureds and insurers alike is when cost is accumulating during a prolonged bidding process and no work is being done. Other options that should be considered could include various engineering solutions, doing accent tiling at entries instead of replacing whole floors, or relocating matching ceiling tiles from a small room to patch a large room’s ceiling and doing a much more economical replacement in the smaller room.
While it is often a component of both emergency services and reconstruction, contents restoration itself provides many opportunities to give the Adjuster and the insured options to direct policy funds intelligently. For contents in particular, we strongly recommend a checklist. Presuming that the Adjuster has retained a restoration company that has the ability and resources to do all the things that can be done, the opportunities to save are great.
Some discussions that might arise from the checklist, and that obviously should be considered before work commences, might be:
Laundry: the basement was wet for 2 days before the loss was discovered and everything smells. Is test cleaning warranted? Should you have all the laundry washed or just what was touching the water? Will your customer accept that it might have smelled musty before the loss? Good contractors can clean it, but decide early how much to clean. Returning one garment that smells will taint the insured’s perception of all the laundry, and can result in a debate about expensive replacement of clothing.
Electronics: contractors that can clean electronics can save the TV. Will you write it off or give them back what they had? That should be decided before costs are incurred for the repair.
Listing: Your customer has a limit on their insurance policy and sometimes it’s a low one. Is the cost of listing a file expense or part of the indemnity payment? Should you pay the restoration company to list all the contents that are taken away? Should they just list the non-restorable contents? Should the Adjuster list, should the customer list, or should no one list? Consider the time it takes to list 25 items in a box, complete with the type of article, manufacturer, and condition. Multiply that by 100 boxes and it is significant. It is part of a premium service offering, but it comes at a cost.
Storage: It is expensive to keep warehouse space available to store contents, and removing them means packing, traveling and binning, then all the same steps in reverse when they go back. If the goods don’t need to be cleaned, would it be more economical to store your customers’ goods in a container on their driveway? Perhaps at the Maple Leaf Self Storage in their neighborhood so they can access their possessions at their convenience? Are they agreeable to that?
All of these considerations require decisions that either cost or save money. Adjusters and contractors alike want to have a happy customer at the end of the day, and the best way to do that is to ensure that the available resources are used prudently. Whether we’re discussing policy limits or manpower and equipment, waste is the result of not having a consistent practice of asking questions and making decisions that direct what is available to where it is needed.
Good Adjusters and good contractors take the time to get agreement on what is “best”, what is expected of everyone, and then deliver it efficiently. Efficiency equates to saving money, either for the insurer because it didn’t need to be spent, or for the customer because it did.
Mr. Edwards’ statement in his article is as true for contractors as it is for Adjusters; “Hasty reports can lead to a lack of vision, confusion, a need for clarification and perhaps backtracking. This is not an efficient or effective way of doing business.”
Article written Feb 2012 by David Sheppard, BA, CIP
David’s career includes the following positions:
- Head Office Claims Manager at Canadian Northern Shield Insurance Co.
- Past President of Insurance Institute of BC
- Senior Adjuster at Pritchard Woodall & Associates
- BC Claims Manager at Zurich Insurance
David Sheppard, BA, CIP / Chief Marketing Officer
604.549.0099 / 1.866.578.3138