Let’s face it – there are clear conflicts of interest in most insurance claims – and that should be of incredible concern to all involved – especially the policy holder!

  • The Staff Insurance Adjuster (their employer is the insurance company). They work for the insurer – and therefore are hired to generate profit for their employer. This means that they earn their living doing their best to control “claims severity” – usually through an attempt to control expenses being paid to their customer (the insured property owner). Every single dollar the insurance company pays out… is one less dollar of profit for the company. The adjuster’s conflict of interest is obvious: they are interested in keeping the insurance claim payouts to a minimum rather than a focus on what is “usual, customary and necessary and in accord with the Standard(s) of Care to be followed.” How can they claim to seek the policyholder’s best interest when their livelihood requires them to serve their employer’s interest?
  • The Independent Insurance Adjuster (they are adjusters who hire themselves out to different insurance companies as a sub-contracted adjusting service). They earn their living by serving their customer: the insurance company (not the policyholder)! This means that in order to keep their customer(s) happy, they must provide value to them (the insurance company). How can they do this? Well, the most obvious way is to demonstrate a cost savings to them. To be fair, one of the important values an independent adjuster can deliver to the insurer is a robust, fully investigated claims file – and that usually means copious amounts of dialogues, debates investigations, research, “comparison shopping,” etc. This can burden everyone’s time and demand tedious dialogues producing claims settlement delays. How can they claim to seek the policyholder’s best interest when their livelihood requires them to serve their customer’s interest (the insurer)?
  • The Independent Restoration Contractor(s) are almost always a “for profit” corporation. Of course, their situation is not much different from that of the Adjusters: They rightly seek to generate profit on the project. That is the only way they can stay in business! However, this need to generate profit produces a distrust between all parties involved in an insurance claim. Was the work truly required? Was the scope of work inflated? Are the rates charged usual and customary or were they opportunistic? It is easy for any contractor to SAY they are the expert who knows what is needed – but that comment will never eliminate the suspicion that they are conflicted by the prospect of generating more profit for the company. How can they claim to seek the policyholder’s best interest when they stand to benefit financially from the scope of work they claim is “required?” Is that a conflict of interest?
  • The “Peer Reviewing, Competing Restoration Contractor” is sometimes dispatched to a Policyholder’s property with the alleged intention of making sure your contractor is doing the project competently. Ummm…. Hello!… They are the competition! Does anyone think that competing contractors aren’t looking for some way to pirate the job and / or attract the insurer’s confidence so as to gain their favor?! Its human nature and business. They say “All’s fair in love and war” and this is particularly true when large business opportunities are at play. These “peer reviewers” are inclined to declare that they could have done it for less money – with less resources – in less time – and with higher quality. Talk is cheap… but the end result is the adjuster now has a lackey who he can use leverage an unfair price reduction resulting in what some would call an insurance claim shortfall. These Peer Reviewing Competitive Contractors are hugely conflicted and rarely produce a competent summary of your contractor’s work.
  • The Insurer’s “Preferred Vendor Restoration Contractor” is clearly the most conflicted of all the parties involved and should be particularly vetted by the policyholder. Make no mistake – the insurance company’s Preferred Vendor has signed a contract with them agreeing to stipulations that may not reflect usual and customary procedures that are competently in accord with the Standard of Care to be followed. Of particular note: dramatically reduced contractor charges are also stipulated for program participants. In states where it is not declared to be illegal, claims representatives frequently leverage extreme pressure upon the policy holder to use “their preferred vendor” under a vocal (and even written) threat to deny the claim, slanderous allegations of independent contractor’s poor workmanship or warranties, limited claim payout if independent contractors are used – and other such methods. The fact is that this is called “steering” [the customer toward a particular contractor] and is illegal in some states and certainly ethically questionable. The matter of legalities also come into play as the preferred vendor contractor enters into a contract with the policyholder when they are already in a contract with the insurer! Does this preferred vendor contractor disclose that they are already in an agreement with the insurer prior to entering into a separate agreement with the homeowner? Are there legal ramifications when this is not disclosed to the insured? (Which customer do they serve in that situation?!) What a conflict of interest! It is for GOOD REASON when policyholders and other experts seriously question the opinions and processes expressed by non-qualified claims representatives and preferred vendor program participants.
  • The Third Party Administrator (TPA) is an entity who is not a contractor… nor are they an adjuster, and [rarely] permitted to discuss claims settlements. Yet, they are hired by insurers to dictate to the contractor their prices, processes, limits, permissions, scopes of work, documentation, communications (etc) … all from their remote location thousands of miles away from the job. TPAs… work for the insurance company and earn their existence by demonstrating they can reduce the contractor’s usual and customary charges. They do not necessarily even know who the contractor is – nor are they mentioned in the policy language. Yet, they muscle their way into the middle of the communications and mandate processes that usually result in a compromised end product that fails to meet the industry’s Standard of Care to be followed. That’s their job! Of course, the TPA’s spin on their job is one of “benefit” for all involved. If that is true – they would certainly be pleased to provide you (the policyholder) with a copy of the program participation “rules.” Also, ask them if they “scrub” the invoices submitted in their proof of loss prior to being submitted to the insurer and ask them if this can be considered “adjusting the scope of loss.” (There are several licenses that may come into question in such a situation including business licenses in the Policyholder’s geographic area, adjusting licenses, etc.) Some have called these TPAs “bullies” as they employ hard core tactics designed to delay payments and leverage unfair reductions in perfectly legitimate charges. C&R Mag Bridges Not Walls11.16 Many Policyholders demand communications with ONLY a fully qualified insurance adjuster in order to receive the most ethical claims settlement practices.
  • The Policyholder – the insured – is also a conflicted entity. Certainly, they can be considered a victim in the loss of or compromise to their property due to some sort of a covered peril. These are never pleasant times. It is human nature to try and turn a bad situation into a gain of some sort. Right or wrong, this obvious human trait leads some to distrust even the policyholder. They have faithfully paid their insurance premiums for years – and now they have a legitimate insurance claim. They are going to make the best of this claim and get as much as they can out of it! At least that’s what the skeptic thinks…

Thus, the circle of trust spirals into oblivion… where nobody trusts anyone for fair play… and all involved an ulterior agenda.

Who can be considered a qualified – yet unbiased – entity in how the Policyholder’s property is repaired? Who is going to pay for this service?

The Registered Third Party Evaluator™

DryStandard Inspections (A subsidiary of the International Dry Standard Organization, Inc.) employs the use of the industry’s most educated restoration professionals who are recognized by their peers to be restoration experts and possess the character and reputation that is honorable and fair. These individuals are bestowed with the title of Registered Third Party Evaluator™ or “RTPE.”

In contrast to the insurance company’s “TPAs” who rarely possess more than an introductory 3 day course into the subject of restoration – RTPEs are true industry icons welcomed on projects where a qualified and non-conflicted consideration of the needs of the project are required.

RTPEs have no interest in how large the scope is… how much money it is going to cost… or who is going to pay for it. No – the RTPE “speaks for the structure – for it has no voice.” DryStandard Inspections has adopted this position so as to remain neutral and objective in their commentary.

To learn more about who the RTPE are – and why DSi warmly embraces them, please visit www.registeredtpe.com