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Bidding Insurance Restoration Not the Best Option, Hand-Pick Contractor Instead

Major insurance claims such as fire or floods are unfortunate events for property managers however, if they never expected them to happen, they would not purchase insurance policies. Most property managers are accustomed to daily unexpected events at their properties and are trained to resolve them.

When a property incurs an insurance restoration loss, such as fire, flood, or storm damage, the best solution for the property manager is to select a qualified insurance restoration firm and eliminate the bidding procedure. By requesting 2 or 3 bids from several contractors, the property manager runs the risk of undercutting the scope of work to which they are entitled. When contractors know they will be placed in a bidding situation, they will tend to keep their scopes to a bare minimum to keep the price low. The most frequent means of keeping a scope lean is by repairing items that would normally be replaced. This could easily cause a property to look patched, rather than having no signs of damage.

Another means of keeping a scope of work small is to leave items out of the original scope with intent of going back to the insurance adjuster to request a supplemental scope at a later date. This practice is deceiving and will slow the restoration process down drastically. In addition, supplementing a scope is usually frowned upon by insurance adjusters; however, if the work was legitimately overlooked, they will accept the supplement.

Insurance restoration contractors subscribe to a price library acceptable to the insurance industry. Decreasing the unit price for each operation will encourage contractors to purchase inferior quality materials and use the least expensive labor, which ultimately gives the property manager and building owner an inferior end product.

Time is of the essence when an insurance loss occurs at a property. Insurance companies require a policyholder to secure a damaged property and prevent any further destruction. This process is treated as an emergency situation, and a qualified insurance restoration contractor will respond immediately to a property manager’s request for assistance. The insurance company will pay for these precautions and securities before the scope of work is written. The transition from emergency services to permanent repair can occur without notice to the property manager, again, if the bidding process is eliminated. Without a break in the work, a selected contractor will write a complete and accurate scope of work and be willing to reach an agreeable price with the insurance adjuster.

Most established property management firms have, at some time, experienced some type of insurance loss and therefore have developed an insurance restoration procedure that serves their needs. Experienced property managers understand that they have the right to select the contractor with which they choose to work.

A property manager should select an insurance restoration contractor that provides guaranteed emergency services as well as expert structural restoration. By having a contractor pre-selected based on their reputation and past performance, a property manager can resolve an insurance claim quickly and professionally.

Written by Sharon Toepfer Burns, President of Toepfer Construction Co., Inc.