Navigating Property Damage Claims: A Guide for Property Owners and Contractors

It’s 9pm on a Saturday night, and you just received a call on your personal cell phone from a long-time customer, looking for help after someone drove a car into their building. You spring into action, deploying a team to your customer to stabilize and mitigate their damages. On Monday morning, you begin the process of reconstruction, helping your customer get back to normal as quickly as possible.

A few weeks later, the building is back to normal, and you send your invoice to the customer, who forwards it to their insurance company. And then you get a phone call no business owner wants to deal with: an insurance adjuster, telling you that they can’t pay your full invoice, because their estimating software says you could have done the job cheaper.

Now you are stuck – your customer doesn’t want to pay your invoice because they believe their insurance owes it, but the insurance isn’t paying. What could you have done differently to prevent this outcome?

Navigating the aftermath of property damage can be daunting for property owners and contractors alike. Understanding the steps to take following a property claim is essential to ensure a smooth process for both parties. Here is some targeted advice for property owners facing damage claims and small- to mid-sized contractors who might be involved in the mitigation and repair process.

For Property Owners: Immediate Steps After a Property Claim

1. Mitigate Further Damage: Your first responsibility after experiencing property damage is to prevent any further loss. This might include covering broken windows, turning off water to prevent leaks, or any other immediate action that can reduce the extent of the damage. Remember, this initial step is crucial and generally supported by insurance policies.
2. Document Everything: Take photos or videos of the damage as soon as possible. This documentation will be invaluable when filing your insurance claim, providing a clear snapshot of the impact, and helping to ensure a fair assessment.
3. Contact Your Agent: Notify your agent about the damage as soon as you can. They'll guide you through the next steps, which typically include filling out claim forms and preparing for an adjuster's visit.
4. Understand Your Policy: Review your insurance policy to understand what is covered and what your responsibilities are. Knowing your policy can help you advocate for yourself throughout the claims process.
   
   

For Small- to Mid-Sized Contractors: Engaging in Mitigation and Repair

1. Collaboration with Insurance Adjusters: If you're a contractor called in for mitigation work, understand that working closely with insurance adjusters is key. Your role in the early stages is to prevent further damage without overstepping into full-scale repairs before the adjuster has assessed the situation. If you can meet the adjuster on site, that is ideal. Always call the adjuster when the scope of work changes or additional damage is found.
2. Accurate Documentation: Like property owners, contractors must meticulously document all work done. This includes taking before and after photos, keeping detailed records of hours worked, materials used, and any challenges encountered. This documentation is crucial for ensuring fair reimbursement from the insurance company.
3. Understanding Estimation Software: Be aware that insurance companies often use software like Xactimate to estimate repair costs, which may not always align with real-world prices. If discrepancies arise, be prepared to provide detailed justifications for your costs, including market rates for labor and materials. Also document all changes in scope of work and damage before initiating additional repairs.
4. Open Communication: Maintain transparent and ongoing communication with both the property owner and the insurance adjuster. This includes discussing the scope of the work, any changes that need to be made, and updates on progress. Clear communication can prevent misunderstandings and disputes over coverage and reimbursement.
5. Educate Yourself on Insurance Claims: For contractors not frequently dealing with insurance work, familiarize yourself with the claims process. Understanding the expectations and requirements can make you a valuable partner to property owners navigating their claims.
   
   Mitigating and repairing property damage presents both challenges and responsibilities for property owners and contractors. With careful documentation and targeted communication, both parties can navigate the claim process more smoothly. For property owners, this helps ensure a fair and efficient resolution to damage claims. For contractors, they represent an opportunity to provide essential services, while ensuring fair compensation for their work. For both parties, understanding the process, and working collaboratively with insurance adjusters are key to overcoming the challenges that accompany property damage claims.