Insurance Pricing and Payment


Pricing and Payment


One topic that we get a lot of questions on, understandably so since it is important to everyone involved is: How do we price our services, who pays for what, when do I pay, and how does that whole process work?

How do you price your services?

This is usually the first question we get once the initial cause of the damage has been addressed, and sometimes sooner! In order to make working with your insurance carrier as easy and seamless as possible, we have agreed to use the same estimating software that they use to price our services. This software determines the price of the scope of work that is necessary to perform the initial emergency services and subsequent repairs based on geographic region of the country. By agreeing to use the same software that they use, we can in turn assure you will not have to pay any out of pocket expenses except your insurance deductible, any upgrades that you elect during repairs, and in some rare cases, any portion of the work not covered by your policy.

What Portion of my claim is covered by my insurance carrier?

That answer depends on the type of policy you have, what was damaged, the cause of the loss (damage), and the age of the loss. Only a representative of your insurance carrier is authorized to make claim determination. We benefit from the experience that comes with managing hundreds of claims every year, and can give you our opinion on what typically gets covered and what doesn’t. But the claims adjuster from your insurance carrier is the sole entity to make that decision. If you have any concerns about specifically what is covered and what isn’t in your claim, we encourage you to contact your claims adjuster. We are always happy to help facilitate “claim determination” by contacting your carrier for you in the event that there are questions surrounding your particular claim.

What if there is no coverage for all, or some of my claim?

In the event that any or all portions of the damage that has occurred to your home or business is not covered by your insurance policy, we will submit a written estimate to you separate from any portion of the work that is covered, if any, before the work begins. You will always know the financial impact of our services before the work begins.

If my entire claim is covered, do I have any financial obligations to C.O.D.R.?

There are several items that you still may be responsible for financially, even if your claim is “fully” covered.  In most cases, you will pay C.O.D.R.  the amount of your insurance deductible. This is generally paid to C.O.D.R. directly to begin the work, and once paid, will be deducted from the final invoice. You also may be responsible for the cost of the initial repairs to whatever was the cause of the loss. For example, if the damage was caused by a broken water line, or a failed appliance, it is generally your responsibility to pay for the initial repairs to stop the damage from continuing. In most cases, it is the cost for a plumber to make a service call to repair the broken line, or an appliance technician to repair the faulty appliance. While we generally do not make those repairs ourselves, as only a licensed plumber can legally do so, we are happy to use our referral network of the necessary licensed tradespeople to facilitate quick repairs in the event you do not already have a relationship of your own. The only other cost to you may come during the Repairs portion of the project. Many of our customers use the occurrence of an unexpected event like the one you are experiencing to perform upgrades or changes to the structure, similar to a remodel, when the time comes to put everything back together. If you are interested in making any changes to your existing home or business, our team of Estimators and Project Managers are happy to discuss them with you and provide an estimate on any proposed changes.

In a covered claim, what does my insurance carrier pay for?

That may depend on your policy. Generally speaking, your insurance company will pay to return your home or business to “Pre-Loss Condition”, or in other words, what you had prior to the damage taking place. Another term used to describe pre-loss condition is “like kind and quality”, meaning using new materials that match the materials that you had. We will provide you a list of material allowances for the items that need to be replaced, so if you are interested in making any changes, you will know beforehand what financial implications your decisions have on the overall project.  Depending on the nature and extent of the loss, your policy may also have provisions to cover either all of or a portion of: the cost of any damaged personal property, temporary housing, meals, loss of income if you are a business, and recoverable depreciation. We are happy to help confirm these provisions with your carrier to the full extent of your policy coverage, and where applicable, assist in providing documentation on your behalf to facilitate reimbursement of these expenses.

Do I pay you, or does my insurance company pay you directly?

That also depends. Our Work Authorization contains a Direct Pay option. If you select the Direct Pay option, we will instruct your carrier to direct the funds for our services directly to us, eliminating the need for you to both deposit their check and write C.O.D.R. another one, or the need to endorse the check before sending it to C.O.D.R.  This is especially helpful for our customers who do not live in Central Oregon and manage their property from out of town. And for our customers who do live here, it makes paying our invoices easier and more convenient. That being said, some carriers have policies that prevent them from paying C.O.D.R. directly, even when asked to do so.  If your carrier does not allow direct payment, or you elect to receive the payments instead of directing them to C.O.D.R., they will typically send you a check for the amount of the claim. Once you will receive the funds from your carrier, you in turn will pay C.O.D.R.

My insurance carrier has included my mortgage company as a payee on my check. What does this mean?

The practice of naming a lien holder as a co-payee on an insurance claim check is known as Loss Draft. Many insurance carriers have either agreements with various lenders or internal policies that dictate under what circumstances they must list a lien holder as a payee on insurance payments. This is designed to protect their interest in the property. It assures that the needed repairs are actually being made and the insurance proceeds aren’t being used for something other than the intended use. If your check arrives with your mortgage company listed as a payee, contact our office as soon as possible so we can begin the process of obtaining your bank’s endorsement. Depending on the bank, this can be a complicated and time consuming process. Our office is staffed with folks that are well trained in the loss draft process, and once they know that your claim will be going through loss draft, can start the process and explain what to expect next in the case of your particular lien holder.

Do I receive all the money from my insurance company at once? How many checks should I expect?

The answer to this question is the same as many others in this document – it depends! In this case, it depends on the nature of the project, and the type of policy that you have.

The nature of your project can determine how many checks you receive. For now, let’s just focus on the structural portion of your claim. In many water loss claims, the structural part of the project is split up into two major components, Mitigation and Repairs. Mitigation is everything related to stopping the problem from getting worse and preventing secondary damage, including: emergency services and the work performed during these service calls, drying equipment, equipment monitoring, and any demolition of unsalvageable building materials. Mitigation includes pretty much everything that your structure requires to be ready to be put back together. Repairs are exactly that, the process of returning your home or business back to its pre-loss condition, or the construction side of the project. Most insurance carriers issue payment for each of these components separately, and in turn we invoice for them separately. Mitigation services are usually completed relatively quickly, whereas the Repairs usually take a little longer. By issuing two separate checks, your insurance company is allowing for payment of the work that has been completed instead of forcing C.O.D.R.  to wait for the entire project to be done, which in some larger losses can be weeks or months.  If you have any questions whether the payment you received was for Mitigation or Repairs, contact our office and we will help you determine what it’s for.

The type of policy that you own can also be a factor in how many checks you receive. If you own a Replacement Value policy, your insurance carrier has the option of withholding a portion of your Repairs check for Recoverable Depreciation.  As your home or business ages, some building materials lose value due to depreciation. The actual amount of that value depends on things like: what the material is, how old it is, and what its life expectancy is. Based on your carrier’s assessment of those materials, they will calculate the value of what you had at the time of the loss versus what those materials cost new to replace them. The difference in those amounts is the Depreciated Value. Under a Replacement Value policy, your carrier owes for the depreciated amount when the repair work is complete and they are satisfied that the work was actually done. Therefore, the check for the Recoverable Depreciation is typically sent at the completion of the job when we submit a Certificate of Completion to your carrier that you have signed. Most policies are Replacement Value. In the event you do not own a Replacement Value policy, rather a Cash Value policy, you may not be entitled to the depreciated value of the claim. Our staff will discuss your options and the ramifications of this type of policy with you in detail before any out-of-pocket expenses are incurred.

The final factors in knowing what else your carrier may send a check to you for is if you have coverage for, and sustained any damage to or incurred any expenses towards, Personal Property or Contents.

Most carriers will want to work with you directly on any reimbursements that are due to you regarding Personal Property because you are in a better position to assist them than we are. Items that may qualify for reimbursement under this category may include: out-of-pocket expenses for lodging and meals because your house was uninhabitable, loss of income if your loss was to your business, increased utility bills to power drying equipment, and replacement of any personal belongings that were unsalvageable. Payment for Personal Property is usually kept by you as they were direct expenses that you incurred.

Contents may be looked at by your carrier as a separate component to your overall claim, and is a service that we provide. Contents claims are for any personal belongings not attached to the structure itself that are salvageable and need to be handled in some way in order to complete the work. Depending on the size and type of claim, your personal belongings may need to be moved from your home or business for storage. If you had a fire, they may need to be cleaned of soot and deodorized. If your loss affected large portions of your house, we may need to store your belongings off site in our facility or in an on-site storage container in order to have enough room to complete the work. If your carrier sends a separate check for Contents, it is usually for services provided by C.O.D.R.

If I receive the checks from my insurance carrier, when do I pay?

We will invoice you for the work that has been completed once we know you have received the funds from your carrier. Please contact our office once checks start arriving so we can help reconcile them for you. Generally speaking, we invoice in the same manner in which you receive payment from your carrier. Once Mitigation is complete and we know you have received funds for those services, we will send you an invoice to match and you will then remit payment to C.O.D.R.  The Mitigation billing usually takes place before Repairs are complete. Then, once the Repairs portion of the work is complete, we will repeat the process, and then again if there is any Recoverable Depreciation or Contents funds that are being paid as part of your claim.

This is a general outline of how the payment process typically works. There are occasions that the payment process deviates slightly from claim to claim and carrier to carrier. If you have questions regarding how your specific claim may vary from the outline above, please do not hesitate to contact our office.

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