Selecting a Restoration Contractor

Choosing Your Path to Recovery:

Navigating post-disaster recovery involves numerous critical decisions, and selecting the right contractor is paramount. Your choice impacts not only the restoration of your property but also your overall recovery experience. At the International Fire Foundation (IFF), we emphasize a thoughtful, informed approach to ensure your needs, values, and policy coverage align with your chosen professionals.

Your Choice Matters: Preferred Vendors vs. Independent Contractors

When it comes to restoration, you may encounter two primary types of contractors:

• Insurance Preferred Vendors: These are contractors who have a direct agreement with insurance carriers to be part of a "preferred" program. While preferred vendors often come with guarantees (typically extended warranties on work), it is important to understand the insurance operational model. Preferred vendors may pay an 8-12% "kickback" or referral fee back to the insurance carrier as a condition of participation in these programs. An adjuster may insist on using a preferred vendor or threaten that a claim will be denied if the preferred vendor is not used; this is inappropriate. Affected community members may use any contractor or vendor that is licensed, insured, bonded and qualified to complete the work according to industry standards. This may or may not be a preferred, or program vendor; each recovery case is different, ensure to complete your due diligence to understand which contractor is best for your situation. 

  • The insurance program or "preferred" operational model can create a potential conflict of interest. It is important to know that insurance carriers or the company adjusters should not manipulate or "cut corners"—such as reducing the service, work, quality of materials, or other factors—to artificially reduce the settlement or payout from your policy.

  • If you witness or anticipate any behavior where an adjuster is inappropriately pressuring you to use a preferred vendor or attempting to compromise the necessary scope of work to minimize the claim, it is imperative to report these issues to the California Department of Insurance (CDI).

  • Your Right: An insurance company, adjuster or vendor should never coerce, force, or unduly influence you into using a specific vendor. This constitutes a conflict of interest. Your adjuster should remain neutral regarding your choice of contractor, provided they are licensed, insured, bonded, and qualified for the necessary services. If an adjuster attempts to force or coerce your decision, report this behavior to Insurance.CA.GOV.

    • It is your right to choose any licensed, insured, bonded, and qualified contractor for your fire damage repairs. "Preferred" or "Program" vendors, who have direct agreements with insurance carriers, may offer advantages:

      • Speed and Efficiency: Program contractors are familiar with the carrier's specific claims process and paperwork, which can often lead to faster service and a more streamlined approval of your claim's initial stages. 

      • Familiarity and Proficiency with Xactimate: One of the core requirements for insurance work is utilizing the pricing tool, Xactimate, to calculate costs for square footage, materials, labor, and other services covered by your policy. The adjuster will generally only approve work, estimates, and bids that are aligned with an up-to-date Xactimate price sheet (which updates daily). Third-party or general contractors unfamiliar with Xactimate or insurance pricing standards will struggle, and with scope of work or estimates may be flat-out denied, resulting in poor outcomes for the policyholder. 

      • Industry Standards: To remain in a preferred program, these vendors typically must adhere to strict contractual performance requirements, including extended warranties on their work, using licensed and certified professionals, and following recognized industry standards like those set by the IICRC (Institute of Inspection, Cleaning and Restoration Certification).

• Independent Contractors (Sourced Through Your Due Diligence): You have the right to choose any licensed contractor. Thorough due diligence allows you to vet legitimate contractor credentials, licensing, insurance, and work warranties independently through resources like the FIREGUIDE.ORG, CSLB.CA.GOV, INSURANCE.CA.GOV, BBB.ORG. This path empowers you to select a contractor whose values and approach align best with your recovery goals. After a disaster, you may have contractors, vendors or public adjusters approach you directly ("fire chasers or ambulance chasers") with unknown expertise. IFF never recommends engaging with fire chasers or rewarding poor behavior.

Scope of Work and Settlement Foundation: Early Steps

• Ultimately, the most important factor determining the access, utility, and execution of the maximum policy limits is the Scope of Work created by the licensed contractor you choose, especially one who specializes in fire damage. The insurance carrier or company adjuster does not create the scope of work, the adjuster utilizes a scope of work created by the selected contractor for the job and gives the final approval or modification prior to work being completed.

  • The Scope of Work is the detailed, room-by-room document that itemizes every repair, replacement, and restoration task. A thorough and accurate scope is the foundation of a fair settlement. Review Scope of Work to learn more about creating the foundation for your recovery and settlement negotiation.

The Critical Need for Fire Restoration Specialists

Fire damage is distinct from general construction. It involves complex issues like smoke and soot permeation, lingering odors, corrosive residues, and often hidden water damage from firefighting efforts.

• Beyond General Contractors: While a general contractor rebuilds, a certified fire restoration specialist possesses the specific knowledge, training, and equipment to properly abate, mitigate, and repair fire-damaged property, contents, and structures. Understanding and complying with industry standards for smoke and soot removal, odor neutralization, and structural drying. This includes certifications from recognized bodies like the Institute of Inspection, Cleaning and Restoration Certification (IICRC) for Fire & Smoke Restoration Technicians (FSRT), Applied Structural Drying (ASD), and Mold Remediation.

• Why It Matters for Your Claim: Improperly handled fire damage, such as superficial cleaning that leaves behind corrosive soot or pervasive odors, can lead to chronic issues (e.g., rust, respiratory problems, persistent smells) and potentially future insurance claim denials if it's deemed the initial restoration work was substandard and not completed according to industry standards. Choosing a true specialist ensures the work is done correctly the first time, protecting both your property and your future recovery.

Key Considerations for Contractor Selection:

Before any significant work begins, ensure clarity on these points:

• Alignment with Your Values/Goals: Choose a contractor whose communication style, project management, and ethical standards resonate with your needs during a stressful time.

• Policy Coverage & Budget: The contractor's scope of work must align with your insurance policy coverage and the agreed-upon settlement amount. Ensure a clear understanding of the estimated budget and how it correlates with your available funds.

• Licensing, Certification, and Expertise: Verify that the contractor possesses the proper state and local licensing, workers' compensation, and liability insurance. For fire damage, specific expertise in water damage repair, mold remediation, and smoke/soot cleanup is crucial. Look for a guarantee of work quality and odor removal.

• Documentation and Communication: A reputable contractor will provide accurate repair estimates and timelines, and efficiently handle necessary claim documentation. They should also provide a Certificate of Completion (COC) and a Certificate of Satisfaction (COS) upon project conclusion. Maintain clear communication throughout the process; address issues promptly with the project manager or owner. Delays in service may be due to adjuster handling or unresponsiveness, if an adjuster unduly delays your recovery, report this behavior to Insurance.CA.GOV.

Emergency Services vs. Reconstruction:

• Emergency Mitigation: Services like emergency board-up, shoring, stabilization or water evacuation are often required immediately for public safety or to prevent further damage. These are typically performed without a detailed reconstruction scope, may not include an exact price, but be billed based on labor, materials, and square footage through pricing approved by the insurance carrier using tools such as Xactimate. Ensure the contractor performing emergency services is licensed, insured, bonded, and experienced in this specialized work.

• Reconstruction & Xactimate: Full reconstruction or restoration generally occurs after emergency mitigation. This is where Xactimate often comes into play. Xactimate is widely used claims estimating software in the insurance and restoration industries. It generates detailed estimates (scopes) by itemizing costs for labor, materials, and equipment based on localized pricing data. These scopes are crucial for achieving an agreed-upon plan between you, your contractor, and your insurer.

YOU ARE IN CONTROL AT ALL TIMES:

Remember, as the policyholder, you control your recovery at all times. It is your policy. It is your recovery. If a contractor, vendor or adjuster is unsatisfactory, you have the right to terminate their engagement and choose another trusted resource. The International Fire Foundation does not endorse any specific organization or group; we are a neutral party. IFF always recommends to complete thorough due diligence to ensure your service providers are licensed, insured, bonded, qualified, align with your policy or budgeted coverage, and possess the necessary expertise to complete the job satisfactorily.

These tips are intended for educational purposes only. No legal advice should be inferred from these materials.