Denying the Dumpster

Specialty service providers have become more prevalent in the restoration industry, and their expertise extends beyond just service on a loss site. They are increasingly called upon as consultants to help determine what damaged materials can be salvaged and what practical responses are needed on large losses.

In the past, commercial losses and other claims involving a large amount of contents would have been replaced if significantly damaged, but new restoration processes and techniques have created a viable alternative for insurers. The need for expertise is particularly evident when the large loss involves textile items, such as window treatments, bedding, linen or a significant number of garments or uniforms. On the residential side, the need is immense; the Bureau of Economic Analysis reports that Americans spent more than $325 billion on clothes and shoes in 2009. For commercial losses, the textile restoration category is in the early stages of what is certain to be a much larger role in the future.

It was clear in the aftermath of Hurricane Katrina that very little was known about textile restoration services. Many hotels, for example, had floodwater damage on the main floor, but upper levels were harmed more by wind-driven rain, if at all. Without a practical solution in place, these hotels and the adjusters assigned to the losses simply removed the wet and lightly damaged items, filled mountains of garbage bags destined for landfills and approved replacement of the items. There was a general lack of knowledge about what can be restored and what restoration processes are available. Today, specific procedures for textile restoration, such as 24/7 response and one- to two-day turnaround for immediate-need items, are widely available, along with additional options like on-site drapery cleaning. Yet, without an awareness of these changes and the practicality of restoration, old patterns are likely to continue.

The specialist's consultative role is exemplified by a big loss in a small Midwest town. July 7, 2007, was one of the busiest wedding days of the decade, as couples were drawn to the numerical uniqueness of the date (07-07-07). Unfortunately for many brides in the town, joyful anticipation turned to horror as a fire in the local bridal store caused smoke and/or water damage to hundreds of dresses just three days before the weddings. A textile restoration specialist was consulted on how to handle the loss and immediately faced a number of decisions.

Some of the store's items were customer-owned gowns on consignment, some dresses were not affected but needed to be placed in secure storage until needed, and still others were in the final stages of alterations. Quick decisions needed to be made due to wedding deadlines and coverage concerns.

The process started with a comprehensive inventory to thoroughly document all of the dresses and gowns in the store. Next came replacement-cost valuations to determine the cost-effectiveness of restoration vs. replacement. From that, it became clear that some dresses couldn't be replaced due to low insurance coverage; restoration was the only viable option. For the dozens of dresses that needed restoration due to smoke and water damage, the textile restorer had to thoroughly dry the items before the restoration processes could be implemented. As restoration began on those items, the specialist arranged for a team of tailors and alterations experts to complete the 100 dresses that needed to be finished before the upcoming wedding date.

Without that on-the-spot consultative direction, the vast majority of the dresses would have been deemed a total loss, leaving brides and bridal parties without practical solutions and jeopardizing the future of the bridal salon.

While the term "consultant" can connote a variety of meanings, there are certain characteristics that set a restoration specialist apart as a valuable resource for commercial and large losses involving textiles.

First, responsiveness and availability are essential. To be of value, an expert must be able to respond to an immediate need and be on a loss site anytime and anywhere. Today's technology extends far beyond cell phones to create near-real-time efficiencies. The prevalence of online communication and digital imaging enables initial evaluations to occur very quickly. An on-site inspection within a short period of time then can verify recommendations in an efficient manner.

Next, a consultant must be fundamentally sound and experienced operationally. This includes a thorough knowledge of the latest techniques for textile restoration, both on-location and at a restoration facility. The consultant will need to know when and how to properly use processes such as ozone treatment, ozonated water, hydroxyls, distillation and agitation methods—each of which has a proven role in the effective removal of contaminants. He must have an awareness of the chemistry involved with a variety of soaps and solutions developed specifically for restoration, of the correct finishing methods, of re-hanging techniques, and of the requirements for mobilization and storage. An understanding of specific environmental regulations also is essential because some states have strict ordinances governing the cleaning industry.

Additionally, a consultant's expertise should include familiarity with how different types of loss will affect various fabrics depending on what caused the damage—fire, smoke, water or other contaminants. This knowledge should extend to an intimate understanding of the most appropriate and effective methods for dealing with each type of damage and each type of fabric. The consultant must also have access to third party laboratory testing for pre- and post-cleaning to determine effectiveness of treatment and to resolve any potential disputes, particularly when litigation is a possible component of the claim.

When claims are contested, attorneys and expert witnesses become key players in the process. Here, a restoration consultant can serve as a resource by supplying testimony and information that support the insurer's decision to restore or not to restore.

This operational expertise must be backed by a thorough understanding of the insurance claims industry and the insurance restoration business in particular. The most effective consultant is one who is adept at comprehending the distinct needs of claims adjusters, as well as others involved with a loss, as each audience has specific requirements and roles.

Because every claim is different and can involve dozens of variables, a consultant can take an objective look at the overall situation and help the adjuster understand and determine viable options that meet the adjuster's objectives. In the very early stages of a claim, a consultant can help determine when restoration is operationally efficient and cost-effective. These value decisions are based on the cost of restoration compared to replacement as well as the qualitative aspect of which items can be restored.

In cases of commercial losses, business interruption exposure often is foremost in the decision-making process. A uniform company or linen rental business, for example, may be susceptible to losing accounts if a covered peril strikes. A consultant can quickly help adjusters make decisions on restoration that prevent or significantly mitigate loss of income for the business and reduce the possibility of over-indemnifying the insured.

An experienced consultant also can work with salvage companies evaluating a commercial loss. By determining the likelihood of restoration success and the typical costs involved, a consultant becomes a valuable resource in the salver's appraisal process.

Although technological advances have significantly reduced the time it takes to analyze data and prepare financial reports on a claim, the old saying applies: Garbage in; garbage out. Inaccurate valuations often result from overly complicated systems and obsolescence of computer models. A restoration specialist can provide actual human intelligence and analysis that cannot be derived from computerized statistical models. The greatest opportunity for financial accuracy comes from the combination of appropriate technology and the expertise of professionals who can account for the variables that differentiate large-loss textile claims.

An effective consultant will have access to resources that enable the recommended steps to be implemented. Suggesting a course of action is a good first step, but at some point in the process, restoration activity must begin. Working with the adjuster to set the scope, the consultant can devise a critical path for success, monitor the process, and manage the communication and documentation necessary for a successful outcome. The solutions provided by a specialist enable the carrier to achieve savings of 65%–80% through restoration (versus replacement) while preserving day-to-day operations of the business.

Wayne Wudyka is CEO of the Certified Restoration Drycleaning Network (CRDN), an international organization of textile restoration. He can be reached at (248) 246-7880 or wayne.wudyka@crdn.com.