For property owners and managers, damage from disasters is one of the greatest threats they face. These threats may come in the form of natural disasters, such as hurricanes, hail, snowstorms or lightning strikes. They may also manifest as accidents that lead to fires, leaks or even a motor vehicle driving into a building. Whatever the cause, insurance restoration offers the best solution, even when property damage exceeds insurance coverage.
What Happens When Property Damage Exceeds Insurance Coverage?
It’s no surprise that property damage is costly, but that fact hits home even more when total losses exceed insurance coverage. Dealing with these realities can become frustrating, especially when you’re balancing aesthetics, function and safety with financial considerations. As a provider of property damage repair in Michigan, EJH Construction is dedicated to serving your unique needs. Navigating the world of insurance is just part of our commitment to our clients. In addition to insurance restoration some of the emergency restoration services we offer include water damage restoration and fire damage restoration. EJH is also an expert mold removal company and can handle all of your mold remediation needs.
When it comes to disaster restoration and insurance restoration, there are two types of contractors to consider. The first type is general contractors. These professionals or companies tend to handle construction and renovations. They know how to build or revamp building spaces and can provide you with a wealth of upgrade options to choose from. Unfortunately, when you employ their services for disaster recovery, you may end up paying for all of their work out of pocket.
In contrast, restoration contractors such as EJH possess skills and experience specifically aimed at identifying and resolving damage to property, and they can be an especially important and knowledgeable resource when property damage exceeds insurance coverage. The skills for identifying the problems caused and the source of the problems are especially important. How so? They help you to substantiate your claims to the insurance company. Disaster recovery contractors may also have specific resources at the ready to handle damage from water, fire and hail, which require different skill sets than a mere renovation.
Why Work With Restoration Contractors
The ultimate benefit of working with an insurance restoration contractor is that you may not need to pay out of pocket. This may differ based on the specific insurance policy you have. Note that some may require deductibles, while others may cap the work at a certain value. However, you may be able to work out repayment when property damage exceeds insurance coverage. This is also helpful when you wish to upgrade rather than merely replace damaged items.
Despite the clear advantage of working with restoration contractors, many insurance companies discourage property owners from doing so. If you consider the differences between the two main types of contractors, the reason for this becomes obvious. Restoration professionals are in a better position to help you make your case and provide more specialized services. In short, it is in the insurance company’s financial interest for you to work with general contractors instead.
The Importance of Specialized Services
There are times when the entity talking you out of using a specialized company is not your insurance provider. Maybe a family member or friend with a construction company wishes to take on the project and you feel inclined to support their business. This may not be a bad idea for minor damage or for incidents related to a collision, such as from a fallen tree. However, their potential lack of experience dealing with insurance restoration could cost you, especially when property damage exceeds insurance coverage.
When it comes to hail, water and fire damage, the risk increases. Specific and necessary know-how related to these incidents may include how fire moves through a building and what structural damage water may cause that is not immediately visible.
Contractors may even need to bring in large machines to dry out rooms or remove contaminated porous materials before reconstruction begins. Without these and other important steps, problems may develop later on that could cost you thousands of dollars — if not more.
Considerations for Homeowners
Homeowner insurance policies come in all shapes and sizes. Most reimburse for claims on physical structures and their contents that are destroyed or defaced by storms, fire, vandalism, theft and some natural disasters. Dwelling coverage is the component that usually pays for home restoration services. Typically, it does not include losses from earthquakes or flooding unless it’s written into the individual policy or the owner purchases separate coverage. Also, some exclude or limit reimbursements for mold or sewer backup claims.
Most dwelling coverage is based on replacement cost valuation, meaning that structures are repaired or replaced regardless of any depreciation. Any construction will be of similar quality to the original materials. However, homeowners tend to purchase amounts based on either their mortgage amounts or their current home values.
Because of these tendencies, it’s estimated that more than two-thirds of homeowners have underinsured their residences. That means their policies may not pay out enough to fully cover restoration work. For repair and restoration expenses that exceed a policy’s upper limits, the homeowner will need to pay the difference out of pocket. A professional cost estimator from a home replacement specialist, realtor or contractor can give you a better estimate of potential restoration costs.
Insurance Restoration: Damage to Commercial Properties
Commercial property insurance works on somewhat similar principles as homeowner’s coverage. Even so, it must reimburse for and protect against losses from a wide range of claim types. Besides physical structures, it must also include landscaping, equipment, documents, signage and inventory. Coverage is generally based on the value of the business’s assets. Some policies also include loss of use or access under their definitions of property damage.
Most businesses’ policy limits are set high enough to pay for repairs and restoration due to covered losses. Keep in mind that some exceptions to this may exist. For instance, additional coverages such as Debris Removal or Pollutant Cleanup could have sub-limits that fall below the total policy limit. Building and Personal Property coverages can also include extensions for Newly Acquired Buildings, but sub-limits could apply to these extensions.
Understanding your business’s indemnity protection is key. Depending on how it’s written, it could have different limits for buildings and BPP, a single blanket limit or sub-limits for individual extensions and additional coverages. Once any claims exceed these limits, your firm will likely need to pay additional costs from its own funds.
Choose an Expert Restoration Company
At EJH Construction, we provide both restoration and renovation services. So, whether you need to restore property after a fire or just want a new look in the office, we can help. We also understand that emergencies pay no heed to standard business hours, so we offer 24/7 availability and work with all insurance carriers.
Selecting the right contractor is key for both residential and commercial restorations. Although insurance companies may suggest you choose from their preferred vendor lists, you are not obliged under Michigan law to choose a company from those lists. The bottom line? It’s in your best interest to hire a licensed qualified contractor with significant industry expertise and credentials from the Institute of Inspection, Cleaning and Restoration Certification.
EJH Construction is a full-service general contractor with over 40 years of experience in disaster mitigation, damage restoration and commercial renovation. With an A+ rating from the Better Business Bureau and certifications from leading industry organizations, EJH is one of the top-rated restoration companies in Michigan. To learn more about your options or get a new project started, contact us through our convenient online form or call our offices at (888) 339-7335.