The contractors outlined specific concerns and offered context for some of the current industry practices. Among the issues expressed were:

The absence of a minimum industry standard for restoration contractors makes it difficult for those purchasing restoration services to fully understand what contractors provide, who is really qualified to perform this work, and who has little or no training in the field.
A lack of document standardization creates some challenges for contractors since every insurer and third-party administrator has its own program requirement document, which may request the same information, but in a slightly different format. A standardized document, similar to the college application form used by more than 700 institutions, would help streamline the process for all involved. ACORD or a similar body could create a standard best practices document template that could be used by all insurers, TPAs and contractors.
Because restoration contractors absorb all costs for labor and materials up front, slow payments for work billed have a direct effect on the companies' abilities to pay expenses such as rent, wages, subcontractors and other administrative fees. The typical accounts payable cycle is 15 to 25 days, while the typical accounts receivable cycle can range from 60 to 120 days or more. Unlike the auto industry, where a policyholder does not receive a repaired vehicle until it has been paid for, restorers are unable to deny an owner access to his or her property until the bills have been paid.
Some contractors will use a direction to pay to ensure payment when the job is completed. Single party checks usually go to an insured who may not use the funds to pay the contractor. If multi-party checks that include mortgage holders are issued, restoration contractors request to be included on the check as well.
The contractors explained that the restoration process frequently starts without the answers to many normal business questions. The practices of collecting deductibles up front, a down payment on services to be rendered and possibly filing property liens are measures used to ensure some means of payment for the expenses incurred as part of the restoration process.
A better understanding of insurer operations, payment processes and the companies' strategic goals would be helpful for most restorers who generally only have a layman's knowledge of the insurance process. The restorers would like to know how they can better support the insurers' goals and work more collaboratively.
The number of software programs used by insurers creates some challenges for contractors who must track which companies prefer which programs and then train their estimators on the programs. The multiple programs, which do not interact with each other, create redundancies that add to the companies' overhead and require them to pull data from multiple sources to generate the information insurers need. The ability to use the software that works best for the contractors and generates the information the insurers require would help alleviate some of these issues.

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Insurers and contractors start talks about property restoration issues

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