It’s Just Not as Simple as Most People Think It Is

You’ve worked hard for it. The American Dream of home ownership. You’ve saved for a while for that down payment and closing costs. You talk to a realtor and a loan officer and you are so excited! Something you’ve worked so hard for is finally going to come true. You have your pre-approval in hand, and your realtor helps you find that home of your dreams.
You get everything in order and soon you have closed on the home and moved in with your family. Things are great! Then one early Fall day, you learn that the remnants of a Category 3 Hurricane that hit the coast hundreds of miles away will be passing over your area the next day. You don’t really think much about it, as rarely does this happen in your area, and when it does, there’s just not much to it.

Water Restoration Training - i40 Structural Drying Academy

That next day is a weekend, and you’re sitting at your new home with your family on a Saturday when out of nowhere, the remnants arrive. There has not been much on the news about it, because there’s just rain and a little wind. This particular storm, embedded in the system coming through, has grown into a massive straight line wind storm in a matter of minutes. The next thing you know, the roof of your home blows up in the air. Part of the roof slams back down onto the house, but the majority of the roof is gone. Everyone is safe, but you watch in horror as rain seems to pour into your home in buckets. The storm is short lived, maybe just a few minutes, but everything in your home is saturated.

Water drips from everywhere and you even start to notice outside debris in your home. You’re thankful that your family is safe, and that you have insurance on the home. You’re able to reach your agent, an agent who truly cares for you and tells you not to worry; they’ll file the claim and get an adjuster out to you as soon as possible. Your agent advised that you have Additional Living Expenses, or ALE, on your policy and that if your house is not livable, to go ahead and get a room in a hotel for the night. You find a nice room and wait to hear from your adjuster. Sunday comes and goes and you’ve heard nothing from your insurance company. Finally, on Monday someone calls you and advises that they’ll be handling your claim and will have an adjuster at your home within the next few days. You ask them who they are, and they advise they are a Third Party Administrator (TPA).

They state that they handle most of your insurance carrier’s claims, and especially in storm situations like this. They tell you that between the damage to homes and businesses in your area, coupled with damage at the coast and for a hundred or so miles inland, there is a backlog. However, they assure the adjuster will be in touch soon, and that they are going to send out a Preferred Vendor to start the cleanup and drying or your home. They also tell you that they need to determine the coverage on your home based on your policy. You don’t understand what this means, so you contact your agent. Your agent calls the TPA and quickly learns that while polite, the TPA is not really interested in speaking with the agent. What the agent and you don’t know is that the TPAs job is to get the insurance carrier out of this claim with as little payout as possible.

On Tuesday afternoon, now 3 days after the event, you are contacted by a restoration company who states they have been assigned the job to get you up and running again. You can finally breathe a sigh of relief and agree to meet them the next morning. Upon meeting them, they walk through your home and see the damage. Your drywall in your home is still saturated, and wet ceilings are now laying on your floors throughout the house. Water still drips from various places, and your carpets are saturated and they stink. Your hardwood floors are severely cupped. The restoration contractor keeps talking about the meter pegging.

You ask what that means and they tell you that it means it is showing your floors, walls, and ceilings are reading as high as the meter reads. The restorers begin to extract the water from your carpet and other floors and then begin removing the carpet and pad from the house. They tell you that they can’t do a lot more right now because they have a Service Level Agreement (SLA-that’s how they Vendor got the job. They have a contract with the either the Insurance Company or the TPA). The SLA limits the amount of work they can do in what is called EMS—Emergency Services. They do set up a couple of dehumidifiers. The advise that since this job is a Category 3 job, they can’t start blowing air all around for fear of contaminating the two rooms downstairs that escaped major damage. However, they tell you they need to speak with the TPA and let them know the extent of the damage. They’ve put the dehumidifiers in to “stabilize” the house. You have no idea about structural drying; in fact, you didn’t even really know it was a thing, but you trust that insurer is looking out for your best interest. I mean, after all, you’ve paid them an annual premium with no claims for over 3 years.
The way you see your relationship is:

What you don’t know is that your agent is the one who is concerned about your best interest. And if you get the right adjuster, he or she is, as well. However, the carrier, the one that actually foots the bill is not concerned about your best interest, they’re concerned about their bottom dollar. So, they hire a TPA to deal with their claims. The TPA has absolutely no skin in the game for you, as they are just there to objectively manage the claim. The restorer is in a bad position because they now have 2 contracts in play—one with you, and one as a vendor with the TPA (or the insurer depending on with whom they have a contract.

All of this puts you, the homeowner, in a bind. You now have a contract through your policy with the insurance company. You also now have a contract with the restorer to dry, repair, and clean your home. Now, you have a TPA involved in your claim, and what you don’t know is that the TPA works only for the insurer, and not for you. And the restoration company is in a bind, because they have two contracts! They have one with the TPA who guarantees them a certain amount of work, and they have one with you, who has authorized them to perform the work. You are about to go on a journey that is going to disappoint you as you find out how it all really works, and how you, the homeowner, the policy holder, are the ones who ultimately get left out of the loop.

Oh, by the way, you’re about to learn the way the system really works, in most cases, and that includes the relationship hierarchy, particularly in your situation in this example:

To be continued………