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Insurance Work: Fire

 
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Old 01-21-2019, 07:15 PM   #1
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Insurance Work: Fire


Meeting tomorrow to see if I want to do an insurance job. Basement fire, not much damage (I'm told) but it will be a down-to-studs repair and remodel of the entire house. More or less my specialty, except for the insurance paying part.

What should I know? Never done one of these.

My operating capital is good. The insurance quote seems in line with my usual numbers. They will be adding some upgrades out of pocket.

Client comes from the best referral I have.
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Old 01-21-2019, 10:27 PM   #2
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Re: Insurance Work: Fire


buy disposable coveralls, lots of gloves & masks.

add new clothing in to your bid.

smoke damage will be the worst to deal with.

likely nothing to salvage & reuse.

once the demo is done job won't seem so bad. you will get used to the odor. whole house should be gutted to studs. after all burned/charred material removed seal all surfaces. plywood acts like a sponge for smoke so to get rid of odor you may have to demo what seems like usable material.

check all electric boxes for odor. you may be able to wipe them out with simple green. maybe....

insurance company will not be happy with change orders & getting them approved can be time consuming. ask adjuster how co's will be handled & time to process. also how unforseen/unknowns will be handled. know the chain of command in the adjusters office, could be handy.

pay could be in draws or billed as completed. adjuster could act as pay inspector, but could also be an independent 3rd party. adjuster can be a royal PITA and likely be a a prick.

change your clothes before going home during demo.

as i said you will get used to the odor.

good luck...

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Old 01-21-2019, 11:02 PM   #3
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Re: Insurance Work: Fire


Hell, I'm not doing the demo! I have a sub for that.

And it's already in the scope to fully rewire and re-plumb. Once you open up a house around here, you pretty much have to.

Good info on payments though. Full payment upon completion would be the kind of thing to keep little guys like me out of these jobs.
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Old 01-21-2019, 11:11 PM   #4
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Re: Insurance Work: Fire


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Hell, I'm not doing the demo! I have a sub for that.

And it's already in the scope to fully rewire and re-plumb. Once you open up a house around here, you pretty much have to.

Good info on payments though. Full payment upon completion would be the kind of thing to keep little guys like me out of these jobs.
Might wanna get a fire water restoration company in there for the demo. They'll have the chemicals to eliminate the smoke smell that you don't have access to.
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Old 01-21-2019, 11:14 PM   #5
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Re: Insurance Work: Fire


I did a fire damage job a couple years ago, it was very profitable. I found that getting the adjuster to put the line items into xactimate program was the key!
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Old 01-21-2019, 11:42 PM   #6
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Re: Insurance Work: Fire


I just read every line in the adjuster's 52 page report. Some of their pricing is crazy (sf pricing for way under normal minimums, for example) but the bottom line is about right.

It looks like they pay about 75% up front to the owners, then the remaining after repairs are done. So my contract doesn't need to involve the insurance company.

There's also a paragraph about possibly paying more if their contractor's price is higher. Not sure if they need 52 pages of itemized items for that to work or not.
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Old 01-22-2019, 12:03 AM   #7
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Re: Insurance Work: Fire


I wouldn't let crazy low prices slide. You'll be the one eating it.
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Old 01-22-2019, 12:48 AM   #8
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Re: Insurance Work: Fire


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I wouldn't let crazy low prices slide. You'll be the one eating it.
It looks like this one I'll be able to bid however I want, and the owner can take it or leave it, and make up whatever difference. I'll do my part to help them get more for their insurance claim, but that won't have any effect on what I get paid.
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Old 01-22-2019, 12:52 AM   #9
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Re: Insurance Work: Fire


I had an insurance guy call me once and ask me why my price was so high. I said, "does the customer know you're calling me and attempting to negotiate for them? He said, "I was just wondering how you came to this price. Can you give me a breakdown of the costs?" I said, ",I don't discuss anything with anyone unless their name is on the contract."

I also said, "if I wanted to buy insurance from you would you be willing to give me a breakdown of all State farms expenses?" Lol!

He never got anything from me and I built their deck.


Mike.
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Old 01-22-2019, 07:53 AM   #10
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Re: Insurance Work: Fire


As a general rule, I don't bid insurance jobs. As you said, you will give them a price and they can take it or leave it. That is ideal, but doesn't always work.
After demo, expect to see change orders. Especially for a fire job.

What I predict is once everything is torn out, the homeowner will say, "I still smell smoke." Then you have to dig deeper. There will be so many little nooks and crannies where smoke is pulled. The homeowner will be smelling the outlets, upstairs. Tracking down all the smell will be never ending.
You're thinking a sub will do the demo, then you will come in and re-build. I think the sub will do the demo and then the homeowner will say, "It's not clean enough. I still smell it." That's where things will start to go downhill.

The reason these fire restoration companies make so much money is because they have people that only work on the price. They have the exactimate program and know how to use it. They can pull out so many little line items, they make a ton. If it's on the exactimate program, the insurance companies almost always pay the bill, without even questioning it.

Good luck. If you want the job, I hope you get it.
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Old 01-22-2019, 08:18 AM   #11
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Re: Insurance Work: Fire


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As a general rule, I don't bid insurance jobs. As you said, you will give them a price and they can take it or leave it. That is ideal, but doesn't always work.
After demo, expect to see change orders. Especially for a fire job.

What I predict is once everything is torn out, the homeowner will say, "I still smell smoke." Then you have to dig deeper. There will be so many little nooks and crannies where smoke is pulled. The homeowner will be smelling the outlets, upstairs. Tracking down all the smell will be never ending.
You're thinking a sub will do the demo, then you will come in and re-build. I think the sub will do the demo and then the homeowner will say, "It's not clean enough. I still smell it." That's where things will start to go downhill.

The reason these fire restoration companies make so much money is because they have people that only work on the price. They have the exactimate program and know how to use it. They can pull out so many little line items, they make a ton. If it's on the exactimate program, the insurance companies almost always pay the bill, without even questioning it.

Good luck. If you want the job, I hope you get it.

We sub for a fire/water restoration company quite a few times a year. Friends with the guy that writes their bids to the insurance companies. Those guys are masters at getting money out of insurance companies.

Anytime I'm called for water damaged floors, I get the restoration company involved on behalf of the homeowner. Getting ready to do a floor replacement that I had the restoration company do the demo on & work with the Ins adjuster. Every little thing is accounted for on the bid. Moving appliances, moving furniture, removing baseboards, hauling off debris per pickup load, removing & disposing of cabinet toe kicks. It's crazy the things they think of & get approved. They have a company they can send floor samples to to get a valuation in todays markets of comparable products.

As far as smoke smell, an ozone machine does wonders for removing smells in a damaged home.

https://www.amazon.com/Enerzen-Comme...=ozone+machine

I bought one for our house, just to use occassionally to freshen up the odors visitors smell that we don't even notice.

Last edited by pinwheel; 01-22-2019 at 08:22 AM.
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Old 01-22-2019, 09:32 AM   #12
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Re: Insurance Work: Fire


Quote:
Originally Posted by builditguy View Post
As a general rule, I don't bid insurance jobs. As you said, you will give them a price and they can take it or leave it. That is ideal, but doesn't always work.
After demo, expect to see change orders. Especially for a fire job.

What I predict is once everything is torn out, the homeowner will say, "I still smell smoke." Then you have to dig deeper. There will be so many little nooks and crannies where smoke is pulled. The homeowner will be smelling the outlets, upstairs. Tracking down all the smell will be never ending.
You're thinking a sub will do the demo, then you will come in and re-build. I think the sub will do the demo and then the homeowner will say, "It's not clean enough. I still smell it." That's where things will start to go downhill.

The reason these fire restoration companies make so much money is because they have people that only work on the price. They have the exactimate program and know how to use it. They can pull out so many little line items, they make a ton. If it's on the exactimate program, the insurance companies almost always pay the bill, without even questioning it.

Good luck. If you want the job, I hope you get it.
All these concerns are things I've considered and as with all my challenging projects, I will do my best to cover them in the contract.

I don't think I would take this on if it wasn't down to studs, complete removal of all wiring, plumbing etc. I'll sub out blasting, cleaning, sealing.
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Old 01-22-2019, 01:46 PM   #13
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Re: Insurance Work: Fire


Deal with the client and let him deal with his insurance company, have your contract with the client. Insurance companies are notorious for beating you on prices.
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Old 01-22-2019, 05:28 PM   #14
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Re: Insurance Work: Fire


We have done a good bit of insurance work, but only as a sub. Around here, there are a few companies that specialize in GC of insurance work. We do some work for one of the best. They have their own guys who do a lot of the basic clean up, light, demo, and some punch/trim work. Our part is generally the heavy demo and the framing. I know that you need to be pretty efficient with the software, and make sure to take good notes of every little thing that pops up.
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Old 01-22-2019, 05:52 PM   #15
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Re: Insurance Work: Fire


I have always found that things even out in pricing when doing the whole job in Xactimate - some items seem low while others are high - if using software check out the component tab
As mentioned above line items (or at least a very detailed description so they can find them) are you & your agents friend
A piece I did a while ago: http://thehtrc.com/2012/tools-trade-estimates-xactware
FYI - ozone is not supposed to be used for more than 24 hours with no one or any animal being in there
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Old 01-22-2019, 07:52 PM   #16
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Re: Insurance Work: Fire


Quote:
Originally Posted by SLSTech View Post
I have always found that things even out in pricing when doing the whole job in Xactimate - some items seem low while others are high - if using software check out the component tab
As mentioned above line items (or at least a very detailed description so they can find them) are you & your agents friend
A piece I did a while ago: http://thehtrc.com/2012/tools-trade-estimates-xactware
FYI - ozone is not supposed to be used for more than 24 hours with no one or any animal being in there

Glad you mentioned the ozone is not safe to breath. I left that out. It will severely irritate your lungs. I usually set the timer on mine for 15-30 minutes in the house & don't come back in for at least 2 hours.
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Old 01-22-2019, 10:23 PM   #17
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Re: Insurance Work: Fire


ozone is a great tool but it is not a cure all.

as i recall my machine had a 30 hour timer at max concentration.

i'd go check it and when you walked in it smelled like a indoor swimming pool.

open the windows & doors and in 15-20 minutes kids could be in there.

it is nasty corrosive stuff, be careful with it.
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Old 01-24-2019, 07:06 AM   #18
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Re: Insurance Work: Fire


Quote:
Originally Posted by SLSTech View Post
I have always found that things even out in pricing when doing the whole job in Xactimate - some items seem low while others are high - if using software check out the component tab
As mentioned above line items (or at least a very detailed description so they can find them) are you & your agents friend
A piece I did a while ago: http://thehtrc.com/2012/tools-trade-estimates-xactware
FYI - ozone is not supposed to be used for more than 24 hours with no one or any animal being in there
Very interesting read. I don't have the Xactimate program. Due to a hail storm, a couple years ago, I got stuck with several insurance jobs, that I normally avoid. I am so tired of dealing with insurance companies. I knew there had to be a way to get a reasonable amount of money for those jobs.
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Old 01-24-2019, 08:48 AM   #19
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Re: Insurance Work: Fire


More uniqueness for this one. They were under-insured. This actually makes things easier. The adjuster basically said they are getting the total amount of their policy, period.

So they'll have to fund a portion of the rebuild, but are essentially getting a long overdue whole house remodel, plus whatever changes and upgrades for pennies on the dollar.
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Old 01-24-2019, 10:44 AM   #20
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Re: Insurance Work: Fire


The BS is pretty much gone out of this one.

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