Friday, May 30, 2008

The Standard of Care

The acceptable standard of care for fire and water (and mold, and wind, and.....) damage restoration has changed dramatically as the damage restoration industry has matured. This change has been particularly pronounced over the last ten years or so.

Prior to the early 1990's, there was really no accepted "standard" by which to guage whether a property damage had been properly addressed, except whether or not the property owner accepted the work and didn't raise too big a fuss about any differences in the appearance (and sometimes the structural integrity) of the building when the job was done. The squeaky wheel was indeed the only wheel that often got the grease.

In 1994 a group of people in the industry, under the auspices of the IICRC (the then Institute of Inspection, Cleaning and Restoration Certification) got together and wrote the first S500-Standard and Reference Guide for Professional Water Damage Restoration. One of my own recollections of an immediate impact of this document, was the change in accepted practice dealing with sewer damages in homes and commercial buildings. Prior to that first publication, there was often an argument from the insurance adjuster about cleaning rather than replacing sewage contaminated carpet (and pad). The conversation often went went something like this:
Restorer: "We need to dispose of this carpet that had sewage all over it"
Adjuster: "Why don't you just clean it?"
Restorer: "Because regular cleaning methods can't affectively address the possible danger to the people who live here"
Adjuster:" Well, [Your competitor] will clean it and I won't pay to replace, we'll call him."

After the Standard was published, a document was in place that said that the carpet must be replaced when contaminated by sewage, the potential liability was shifted to the insurer if they argued to clean instead of replace and the argument to clean was a thing of the past. Consumers came out ahead.

The S500 has been rewritten and republished twice since then and is a pretty widely accepted document, establishing the required and suggested procedures for dealing with water damage. The most recent update was published in late 2007 and achieved ANSI status. Which means it is a peer-reviewed standard, was written with broad-based perticpation and has the ANSI seal of approval.

In December 2003 the IICRC published the S-520 Standard and Reference Guide for Professional Mold Remediation. This, like the earlier S-500 did for water, set some baseline acceptable practices for the remediation of mold. The S-520 has been in the process of being rewritten in a manner that will allow ANSI approval for the past two years or so and should be republished soon. I had the opportunity of serving on that rewrite committee and chairing the scetion of Tools, Materials and Equipment.

Other bodies have also published standards and guidelines defining best practices in areas of the restoration arts. The RIA (Restoration Industry Association) first published the NIDR Guidelines for Fire and Smoke Damage Repair in 1997. This document describes best practices for the restoration of fire damaged property.

The important point is that practices that were acceptable 20 or 30 years ago are not acceptable under the current standard of care. For example, it was once common practice to cover up smoke damage in homes following a fire using heavy encapsulant coatings. Today, the proper technique involves aggressive cleaning and removal of most if not all smoke residues and restoration of the property to a pre-loss condition whenever possible. This is important to the property owner, particularly if and when a potential buyer of the property inspects the attic or the crawlspace and sees a solid coating of white paint, instead of the clean wood finish that would be expected in an undamaged home.

When that happens, the value of the restoration work becomes apparent long after the price is forgotten. Insuance policies promise to restorer property to a pre-loss condition. We think the successful accomplishment of that should be the goal of every project and the measure of an acceptable standard of care

Tuesday, May 13, 2008

No-Conflict Restoration

No-conflict restoration is more about conflict-of-interest than about disagreement.

For the past several years many insurance companies have offered a tempting deal for damage restoration contractors. Sign a contract with us to use our pricelist and we will steer business from those who have damage claims to you.

These arrangements are usually called preferred vendor programs. Most preferred vendor programs have some fundamental flaws.

First they are based, first and foremost, on price. Typically a vendor is chosen on an agreement to follow prices published by a company called Xactware, which is owned by the Insurance Services Organization. Xactware uses a scheme called feedback that gathers settled claim amounts from insurers and contractors that have agreed to adhere to that pricelist for much of the data they use to develop their pricelists. Xactware claims they don't set prices, but......you may already see the man fixing prices and blowing smoke behind the curtain in the Wizard of OZ. We think that below market prices lead to below standard service.

Then, the question arises, do the contractors work for insurance companies or do they work for the property owners? It's not that anyone intends to improperly favor the insurer when a question arises about what is the best way to put property back to its pre-loss condition, but if I depend upon an insurance company to deliver work to me on a daily basis........well, we just don't want to be in the position where there is any confusion that we work for the property owner and with the insurer. Not the other way around.

We believe price-based preferred vendor arrangements create a conflict of interest for restoration contractors and we have chosen to provide no-conflict restoration service to our clients. When a property owner suffers a loss, they have a right to hire the contractor of their choice. We hope they will choose us to help you recover from a damage event because we provide the best service at a competitive price-not because we are a captive contractor to an insurance company.

For a more much more detailed discussion of the challenges presented by common practices in the insurance restoration business visit http://www.10and10-is-a-lie.info/ .