Living in the Moment
Whether you believe that the weather events are cyclical or view them as a trend, I think that we can all agree that our current weather events are more severe and more frequent than the recent past. Understanding the finer details of your insurance coverage and the protocols of your insurer are important to review prior to making a claim. Insurers will often quietly implement policy limits to minimize their risk in areas that have experienced continued flooding; leaving it up to the client to request upgraded endorsements such as sewer backup and overland flooding.
Network Health
Policies for claims handling have evolved significantly in the past 20 years, mainly to combat leakage and claims overages where the insurers feel that they have been taken advantage. Oversight comes with a cost and though I believe that it was long overdue; my feeling is that the insurers reaction to years of what they considered lawlessness has not been successful. Insurers spend countless dollars enforcing rules on their network restoration providers, while waiving oversight on claims where services are completed outside of their network.
With the increased commonality of extreme weather events, insurers are often obliged to work outside of their network to service their clients where contractors charge their normal fees and do not carry the burden of reporting and qualifying the charges to the claim.
The health of the industry and ability to respond to disaster is also correlated with the resources available to respond to weather events. Restoration providers are in a constant cycle of providing emergency and repair services. By taking a buy out or cash settling a claim you are removing a vital revenue stream that balances the health of the network and ensures that help is available when needed.
These policies have resulted in restoration contractors having less capitol to grow and maintain their firms.
Insurance companies would be better to support the contractors in their network by reducing the oversight, incentivizing performance and limiting the option for cash settlements.
I would suggest familiarizing yourself with the contractors endorsed by your insurance provider, request information on their claim policies and oversight practices. Ask them what they are doing to support the local restoration providers and adjusters.
Contents Claims
Our systems generate detailed cleaning vs. replacement cost reports which are occasionally used to accurately settle with our clients on cleaning costs. Although they give our firm a competitive edge; I am rethinking making them readily available. Certainly, when the insurers actively seek a cash settlement rather than restoration.
