When working on a water damage claim either with or without any environmental impairment, an adjuster often considers reports from inspection companies as well as good faith estimates from restoration contractors. In some cases, the damages are clear and the costs are usual and customary. In other cases the damages are extensive, and the claim is complicated and contentious. Securing a second opinion may be just what the adjuster needs to bring clarity to the claim and to be confident that the value of the claim is justified.

All reports should speak to cause and origin — is this peril covered? — and provide photographic documentation of property damages. If infrared thermography is utilized, then the images should be included in the report when water anomalies have been identified and verified. The more documentation exists, the better — provided that it is written in a concise manner so as to be readily understood.

If environmental testing has been conducted, then who has determined if the levels listed on the laboratory reports are actually elevated? In short, what are the standards for both restoration and inspections? Are the contractors hired by either the adjuster or the insured actually applying these guidelines?

The Vetting Process

Professional inspectors should have experience in building science and environmental testing. There are several independent certification bodies that can verify the experience of the inspector, recommend training courses, and conduct closed-book testing exams. The term “council certified,” which is akin to board certified, is issued to those individuals who achieve certification from such organizations. Individuals with titles such as Certified Industrial Hygienist, Industrial Hygienist, Certified Indoor Environmentalist and Certified Indoor Air Quality Manager are examples of various credentials.

Professional restoration contractors should achieve training from similar independent organizations. Moreover, both inspectors and restoration contractors should follow guidelines and standards as set forth by the Institute of Inspection Cleaning and Restoration (IICRC) as well as those established by the Indoor Environmental Standards Organization (IESO) and the American Industrial Hygiene Association.

The adjuster should require that an inspector provide the following documentation: a copy of any independently issued certification; a copy of the company's insurance coverage; a list of references; examples of reports; and his history of working with claims. An inspection report for a claim differs greatly from what is written for a consumer. For example, an insurance investigation report should focus heavily on the cause of the loss, the extent of damages, and the plan to remediate. Client concerns about health issues may not have a place in such a report unless specifically requested by the adjuster. Inspection reports should be fact-orientated and thus devoid of any speculation.

If the adjuster looks to hire a re-inspection company, then an elevated level of credentials and experience is warranted. The re-inspection company may physically re-inspect the property after a review of the original report. It may also be tasked with reviewing the restoration contractor's estimate in terms of the proposed plan, not specific costs.

Maximum Impact

There are cases where the hiring an independent inspector may not be required, such as with small claims with minimal property damage and clearly defined cause and origin. However, the vast majority of water damage and environmental impairment claims will benefit from the use of a qualified inspector working for the adjuster. The benefits include:

Independent cause and origin.
Production of a restoration plan that focuses solely on repairing what is associated with the claim and ensuring that excessive repairs are not required.
Independent damage assessments.

The dollar value of water damage claims with or without environmental concerns are often high-value losses. The expense of hiring a qualified inspector at a market price of $1,000 (residential) can be easily offset by the technical report that includes a detailed restoration plan. The plan, often called a “protocol,” is the blueprint for any required restoration work. It should focus on only what is necessary to repair the covered loss. Without such a plan, the adjuster must rely solely on his own inspection and the bids received from the restoration contractor. If the bids received are excessive, then there is little or no documentation to argue the reduction. The inspection report will make the case for the adjuster, and it will restrict the restoration companies to the written plan. Reducing the restoration costs by having an independent report and protocol saves more than the cost of the inspection in the majority of cases.

If a claim has an environmental impairment covered loss for mold or bacteria, then the second opinion becomes even more valuable. Many inspectors who collect environmental samples for off-site laboratory analysis lack the ability to interpret lab reports. Understanding and reviewing lab reports requires a high degree of experience and knowledge of the various possible organisms that are either a normal part of an indoor ecology or are present because of a water damage event. Likewise, organisms may be present that are normal but nevertheless viewed by the inexperienced inspector as hazardous to the occupants. This false alarm has caused considerable distress to the adjusters as well as to the insured. Having a second opinion on environmental laboratory results is highly recommended, as is the use of a new EPA-developed DNA test for indoor environmental molds. This Environmental Relative Moldiness Index (ERMI) test is highly accurate and comes with a score that compares the property to an EPA index of 1,100 homes previously tested by EPA.

It is to the claim adjuster's advantage to hire only highly qualified inspectors and use the second opinion option when the case necessitates. The key is to validate experts and ensure that their reports meet all of your requirements. Keep in mind that the goal is to reduce the costs associated with the claim while valuing and trusting the inspection process.

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