The Florida Association of Public Insurance Adjusters Annual Convention starts today. I have been asked to speak to their Board of Directors this afternoon regarding their concerns about restoration companies and repair contractors acting as policyholder representatives in the negotiation and settlement of insurance claims. It is a growing trend and one which generally is not good for the insurance companies or the policyholders because of inherent conflicts of interest.
Fifteen years ago, there were few construction firms dedicated to property insurance recovery, repair and restoration. Today, it is a huge industry, with many firms actively involved in the business on a national basis. The types of construction related vendors vary from small board-up companies, to water dry-out companies, to well-known vendors such as Servicemaster. Major construction companies such as Belfor USA work almost exclusively in major catastrophe insurance construction. The growth is largely due to the bottom line margins, which typically vary from thirty-five to forty-five percent of the total repair. Catastrophe reconstruction can be very lucrative, and the secret is out in the construction industry.