To do you justice, I have only listed a few key points and answers to your request.
As you may know, the insurance restoration field is a specialized field. I have worked both sides of the fence for the last 16 years as a restorer and adjuster for 39 different carriers.
The biggest mistake that most regular contractors make, when they try to enter the insurance restoration field, is that they do not have the proper education, correct equipment, qualified technicians or proper education/experience in how to prepare qualified insurance estimates for emergency services, mold and repairs. In addition, it also depends if you finance the job or wait till insurance funds arrive.
The majority of emergency service contractors collect the deductible up front and bill the carrier for emergency services. Full-service restoration contractors (those that handle emergency service and repairs) will usually start repairs or complete them before the insurance funds arrive. Yet, in today's economy, and, with insurance companies delaying pay outs, risk % has increased because you are basically financing the job and don't know when or if you will get paid.
While this sounds strange, those that operate this way get most of the work. This is the risk of being in a multi-billion dollar industry. So, this line of work is not for all contractors. In addition, you need to be prepared with technicians and equipment if you plan to promote 24 hour emergency services.
In addition to the items required above, and, if you plan on getting into this business full-time, the most important asset you must first address is someone will all around experience (someone who has actually done the work, knows how to write estimates and has some type of insurance background, people and communication skills, empathy, and marketing skills.
You need someone who isn't looking for a paycheck, but wants to have a career and help build a company.
If you consider my comments above, I highly recommend against teaming with a public adjuster. You need a qualified in-house person to run point on all insurance claims. If you try to bring PA's on your jobs, you will get a bad reputation with adjusters and carriers.
Now to your original question. You need a work authorization and a contract. I have used the same work authorization for 10 years throughout the country, which covers all types of property damage losses. It basically states that the insured is giving you full authorization to do whatever it takes to mitigate the losss for property and contents. Once you employ a qualified person to handle your insurance claims, then, you, in-house, can provide a full array of services to benefit the insured.
I tell people that I have the answer before you have the question.
Please call or e-mail and after some discussion, we can discuss how I can help you with the forms required and for your use. Some of the items you want to address are not simple black/white issues. This is where the experience comes in; otherwise you are opening yourself up to liability issues and lawsuits.
I'm trying to figure out the wording to use to cover my ass as well as the HO's.
Having a contract alone is not enough to protect you and the insured, if you don't understand insurance coverage and policy.
Blah blah
agree blah blah
scope of work blah
insurance co blah
1) While a work authorization/Direct Authorization to Pay allows you to perform any and all services to mitigate the loss, it also opens you to liability issues if you don't know what you are doing.
2) Contracts. While my work authorization usually covers everything, so that I don't need a contract, a contract, in todays' economy, can outline draw schedules, change orders, lien rights, etc.
3) A Scope of Work is the computerized "line item, unit pricing" estimate that you write to be submitted. Again, this is not something you learn overnight.
Photos are a must. There is also a manner in which you need to learn to take photos.
I need to cover bases such as:
Dealing with insurance co to cover a scope of work (getting them to pay for "everything" the HO lost)
Example of Experience:
A GC friend of mine wrote an emergency service estimate on his own for $10,000, using Quickbooks. The insurance company questioned the estimate.
When I looked at it, I couldn't figure it out. I rewrote the estimate for $16,500 and the insurance company accepted.
On the same job, the adjuster wrote the repair estimate for $22,000. I wrote a scope for $42,000, and, today, they paid $38,000. I have to review their documents and go after the other $4,000.
I see so many contractors that leave thousands of dollars on the table because they don't know how to write an insurance scope.
Being able to discuss changes to the scope (ie: HO had hard word under carpet but just replacing the carpet. Using the hardwood $ to replace other windows not damaged by fire)
This is not reflected in your insurance scope. This would be reflected in your contract with a change order. Without more detail, the rule of thumb is that the carpet is your primary floor and this will be covered by insurance. Cheaper lumber could be used to build up the floor and the carrier may not pay for the hardwood floor.
If this is a true hardwood, the sub floor is most likely 3/4" plywood. So if you were only going to replace carpet, you must inform the insured that their floor will drop 1-1/2". If you don't keep the carpet the same level, the walls will also drop and you may need to use a larger base. This will effect casings and cabinets and drywall also.
Is it safe to "contract" the fact that the co. would be eating the HOs deductible, or just assure the HO you will?
I would not reveal this information to the carrier. It is none of their business. Yet, I am not sure why you would absorb their deductible. If you have the experience and salesmanship, you shouldn't have to absorb the deductible. I have never done that. Yet, I understand that if you are just getting your foot back in the industry, you, sometimes, have to do whatever it takes.
I tell HO that I don't do free estimates, and you either use me or your don't. I am very confident in my experience and quality of work....again, restoration experience is not something you learn overnight......It doesn't matter how long you have been a contractor, this is a specialized field.
What I hate is I can't ask my mom to show me an old contract...
Doesn't matter...I can help you.
So, what I'm asking is:
Can anyone, or many...
Post wording they use in agreements with HOs when the price of the job can't be set b4 it is signed?
Giving the contractor control over dealing with the insurance co directly.
See #1 Work Authorization above.
One more important point: You need to have a very strong understanding of detecting/monitoring moisture content and structural drying of a building before any repairs are made.
Oops! One more thing. For you to be successful, you need to make an investment in 1) a key person with "hands-on" experience and marketing/estimating skills (business/insurance construction/background) and 2) equipment/education.
Call or e-mail for further detail and I can help. This is too large a topic to discuss in detail online.
Mark
210-823-3864
[email protected]
