Don't Overlook Insurance Restoration
March 11, 2008
During nearly 37 years as an insurance claims adjuster, I have signed insurance company checks totaling hundreds of millions of dollars made payable to general contractors for the restoration of damaged property. I have handled insurance claims throughout the country from Florida to the District of Columbia, from Savannah, Ga. to Los Angeles to points south such as Caracas and Maracaibo, Venezuela and Mexico.
Over the years, I’ve met many builders who wanted to know how they could get into the business of insurance restoration. They knew their particular building trade well, and had already proven that there was a good living to be made in new construction and remodeling. They also knew that there was a way to expand their business, with an extraordinarily wealthy new customer, the insurance company.
In order to succeed in the business of insurance restoration, one must not only be proficient in a particular building trade, but must also understand the insurance restoration industry and how insurance company restoration money is paid out to contractors (sometimes in advance). Without this knowledge, contractors may be missing out on some very lucrative opportunities.
Tens of billions of dollars are paid out annually by insurance companies to restore damaged property. Most of that money is paid to general contractors, carpenters, plumbers, electricians, painters, carpet layers and other remediation companies of all types.
While insurance restoration work represents a tremendous source of income for these contractors, their availability to perform this work is equally important to the insurance industry.
A tornado ravages a city. Homeowners sustain extensive damages and call their insurance companies. The insurance company may instruct the owners to call a contractor or they may call in a contractor with whom they have a relationship.
Fire destroys a warehouse. The owner calls his insurance company. The insurance company calls a contractor. Lightning strikes a butcher shop, blowing out the freezers and jeopardizing the company’s inventory and business. The butcher calls his insurance company. The insurance company calls a refrigerator mechanic.
The fact is, casualties happen regardless of the state of the economy. Therefore, insurance restoration work can represent a steady source of income if you know how to position yourself with insurance agents and adjusters.
Contractors (and by contractors I’m including any and all “subs”) need to understand insurance company operations and how to successfully sell their services to insurance adjusters.
First, a contractor must be aware that there are differences in the roles and relationships between the insurance adjuster, the property owner and the insurance company. Understanding the interplay of these three relationships is critical.
The property owner wants to collect all that is possible (and sometimes more) under the insurance terms. Further, he wants to lay out as little of his own cash as he has to. The insurance company wants to pay as little as possible within the terms of their policy (which is a contract between the insurer and the property owner). The adjuster’s role is to be a “regulator” of sorts. Ideally, he wants to reach an agreement that is acceptable to both property owner and insurer. However, if there is any controversy, the adjuster will protect the interests of the insurer first.
It is within this scenario that the restoration contractor walks the proverbial “tight rope.” Performing satisfactory work for a property owner to make sure you get paid while providing a scope deemed fair and acceptable to the adjuster and the insurance company hoping that they’ll call you again on future losses.
Meeting and Offering Your Services to AdjustersWhere and how does the contractor meet insurance representatives with whom to form liaisons? Establishing these all-important contacts is key to successful insurance restoration contracting. It is the adjuster who will provide the contractor with jobs.
Independent adjusters are usually listed in the phone directory. Insurance company adjusters will be a bit harder to find. There are industry directories that specifically identify adjusters at various insurance companies within your operating territory. There are also professional associations of claims adjusters. You can check with the insurance commissioner of your state. You can also go online and enter your city or county area along with the term “claims associations.” Once you find these organizations you can inquire and arrange to attend their monthly meetings. They are usually open to anyone who serves the industry.
I met a guy in 1980 who did small repair jobs for adjusters out of his pickup truck. Over the years he has grown in his knowledge of the insurance industry and how adjusters operate. He has become an extremely successful and wealthy contractor from his association with the insurance claims industry. It’s an ever-expanding industry that continues to grow with no sign of decline.