10/11/2007

Specialists Resolve Challenging Claims

A specialty niche comes of age

By Wayne M. Wudyka

Did you hear the one about the man with 97 pairs of gloves? No, he only had two hands, and while it may sound like the lead-in to a bad joke this was part of an actual claim from a house fire. Naturally the adjuster on the claim was a bit skeptical, and rightly so. After all, who could anticipate a scenario reminiscent of Imelda Marcos. Remember the eccentric First Lady of the Philippines and her infamous 1,000 plus shoe collection?

Professional service providers who specialize in textile restoration witness first-hand a variety of less-than-typical situations, ranging from unusual and exotic items to large and unexpected quantities. Each case presents the potential for additional exposure or a challenge by the insured. In the case of the 97 pairs of gloves, all it took to convince the adjuster was the review of several digital photos and a detailed inventory conducted at the loss site signed by the insured. What could have been a contentious situation was resolved easily thanks to standardized protocol followed by the textile restorer.

Just a few short years ago, this likely would not have been the case. Back then, the typical process for restoration of textiles damaged by a covered peril was handled in an inconsistent and often haphazard manner. Affected items were dropped off at a local drycleaner and checked in like any other retail item. An inventory would be developed from the cleaner's internal "point of sale" system. The inventory then became the invoice. Unfortunately, there was no documentation for what was taken or not taken from the property, resulting in potential for disputes.

Today, a much more detailed and thorough service- oriented process is what separates retail drycleaners from textile restoration specialists who focus on the insurance industry's specific needs.

A textile restoration company's service standards must follow those of contents companies. Specifically, including all vital components of textile restoration:
  • Around-the-clock access
  • Onsite room-by-room inventories
  • Nonsalvageable lists pre- and post-cleaning
  • Control sheets for valuables
  • Textile protection for transportation
  • Pack-out materials
  • Secure temporary storage
  • Photographic documentation of the loss
  • Rush orders (to reduce additional living expense or ALE)
  • Customized cleaning equipment
  • Ozone rooms

The textile niche even encompasses third-party administrators, electronic interfaces to pricing specialists and Internet-based claims assignment similar to the structural side. Ultimately, the quicker and more professional the response, the more the indemnity can be minimized and customer satisfaction can be improved. At an average cost savings of 84% compared to replacement, textile restoration also allows the insured to use more of their content coverage on other areas.

In today's economic environment, contents have become the largest and fastest growing category on insurance claims, and textiles (clothing, coats, shoes, belts, purses, hats, stuffed animals, window treatments, linens, towels, bedding, wedding gowns, tapestries, leathers and furs) comprise the largest component of contents, approximately 23%. Homeowners' textiles can be surprisingly valuable; a typical family of four can easily accumulate $25,000 in clothing within a few short years. Additionally, heirloom-quality and one-of-a- kind specialty textiles have a high sentimental value for the insured. Without proper protocol, particularly with onsite inventory, there is no way to verify or document what was removed from the home and what condition it was in-the perfect scenario for disputes.

Look for a textile restoration specialist who has made a significant investment in full-service facilities and equipment (boilers, customized washers, drycleaning machines, specialized window treatment cleaning equipment, presses, ozone chambers, secure storage, etc.) for restoring garments and other fabric items. Highly-trained, skilled professionals operate in the field as well as in the plant; proper appearance and communication-namely uniformed representatives who are courteous, efficient and understand the claims process-are imperative. Standards such as these result in better auditable inventory control, accountability, onsite and offsite efficiencies, and decreased ALE costs-resulting in overall excellent customer service and policyholder satisfaction.

Special Solutions for Special Challenges

Beyond the uniform procedures in the field, a textile restoration specialist should also be technically sound when it comes to cleaning and restoring items. Applying a scientific approach, textile specialists utilize multiple cleaning formulas specifically designed for restoration and must be able to clean at relatively low temperatures and low pH (more acidic than alkaline). Such expertise can be invaluable, especially when specialty and high valued items are damaged during a loss, and the insured is faced with the unsettling prospect of losing treasured items.

In Santa Barbara, Calif., one textile restorer handled a loss that included more than 3,000 vintage garments infested with moths, many dating back to the 1940s. They were faced with the challenge of handling each garment with extra care to preserve its admired quality, while removing all of the insects from the clothing. Adding to the complexity, moths can reproduce quite rapidly, and frequently hide in inconspicuous places such as the collars and cuffs of clothing. Garments that are delicate, ornate, historic or vintage require special treatment, especially when they are affected by insects, because the clothing typically cannot withstand intense cleaning solvents and insecticides.

In this case, the specialist was able to restore the items to their pre-loss quality. The replacement cost of the wardrobe was estimated near $400,000, yet the items were restored for less than 10% of replacement. Even more impressive was the textile restorer's ability to preserve the unique heirlooms, maintaining a rare collection that would be extremely difficult or impossible to replace.

Another key component of textile restoration is availability because fast response is critical for successful restoration. By reducing the effects of stains, odor and loss of fabric strength, as well as dye transfer, shrinkage and mold growth, textile restorers can achieve substantial success when they are able to begin work within 24 hours of the loss.

When a leading contractor in the Richmond, Va. area was turned down by a local retail drycleaner for assistance with a large loss, a textile restoration specialist was called in to handle the demanding job. As a result of an arson fire, more than 1,600 pieces of heavily smoke damaged military dress uniforms required immediate processing-almost all were needed for a ceremonial event scheduled to take place only four days later. Despite the majority of the order requiring secondary ozone treatment, a deodorizing process that breaks up the smoke molecule to prevent odor from being set in the fabric, the textile restorer completed the entire order within 72 hours. With a total of 1,644 pieces to restore, only 30 were deemed non-restorable. The prompt turnaround and skilled restoration allowed all members of the local armed forces unit to attend the military ceremony in full dress uniform.

While retail drycleaners require customers to come to them and accept pre-determined turnaround times, textile restoration specialists respond to the needs of the individual customer, including response and service requests. Standard procedures such as operation outside of normal business hours, detailed onsite inventory, secure storage of restored goods and prompt delivery back to insureds have enabled textile restorers to set new standards for handling the textile portion of a claim.

The Value of a Third Party Opinion

Textile restoration specialists also incorporate methods to satisfactorily resolve issues between adjuster and insured. Case in point, a textile restorer was called by an adjuster in New Jersey to inspect a Halston designer dress valued at $10,000. Another drycleaner in the area had told the adjuster the garment should be put on the nonsalvageable list, but the adjuster wasn't satisfied. The textile specialist noted that many of the problems with the dress were the result of age, not the loss itself and sent the dress to the leading independent source for textile analysis to determine the cause of the stains and damage.

Their lab confirmed the textile restorer's evaluation and concluded that marks on the dress were old perspiration stains. The adjuster's persistence and the textile restorer's diligence saved the insurance company $10,000 on the item. As a part of their industry specialization, textile restoration specialists have access to the foremost independent testing service, which has been used in many instances to provide an expert and valuable third party opinion.

The Evolution of the Claims Industry

The insurance claims industry, facing a changing environment where specialization is increasingly common, now can turn to niche businesses that focus on providing expertise to create value. The previous practice of one source handling all aspects of a claim isn't always practical, due to a variety of factors-from the pressure to reduce severity to an increasing complexity in property claims.

Insurance restoration service providers have evolved to include a variety of specialties that better meet the needs of adjusters, contractors and other groups. Today's claim landscape has broadened to include such niche experts as water mitigation, electronics recovery, flooring replacement, art restoration, independent testing and textile restoration. Fortunately, in many instances, the deployment of technology has positively impacted the ability to coordinate disparate claim resources without increasing work loads.

The increased complexity of the claims process and a heightened focus on customer retention created a demand for refinement, which led to these more sophisticated services. In turn, specialists serving the insurance industry have implemented enhancements through training, education and testing, which created more advanced protocols to better meet the distinct needs within this changing claims environment.

The textile niche is an evolving example that truly is coming of age. As a result, a dedicated textile restoration service provider is in fact a specialty content company, with sophisticated protocols to better meet the distinct needs of the insurance claims industry.

Wayne Wudyka is CEO of Certified Restoration Drycleaning Network (CRDN), specialists in restoring clothing, textiles and fabric items. For more information call 1.800.963-CRDN or visit www.CRDN.com.

- SIDEBAR -

Professional textile restoration encompasses several steps designed to serve and protect adjusters while improving customer satisfaction for the insured. They include:

1. 24/7 Response-The job starts when the phone rings. A textile restorer must be available around the clock to respond to calls.

2. Onsite Inventory-Textiles must be tracked like any other component of contents. The process starts with a detailed room-by-room inventory conducted at the loss site and is signed by the policyholder to ensure that what leaves the house is accurate and can be accounted for.

3. Rush Service-A textile professional is able to restore and return emergency needs clothing to the insured within 24-48 hours, which reduces ALE.

4. Prompt Invoicing-Providing a detailed invoice/estimate within seven days helps the insurer accurately set reserves.

5. Secure Storage-A textile restoration specialist often acts as the insured's "closet" by storing restored items until the homeowner is ready for them to be returned. Storage standards include an electronic security system; homeowners should be able to visit the storage facility with a 24-hour notice; a facility that is safe, well-lighted and properly insured to cover liability for visiting homeowners; and the facility must have proper insurance coverage to meet the value of items stored.

6. Guarantee-A professional textile restorer will guarantee work; items that cannot be restored to pre-loss condition should be removed from the bill.



Wayne M. Wudyka is CEO of the Certified Restoration Drycleaning Network (CRDN), an international organization of textile restoration. He has been a CLM Fellow since 2012 and can be reached at (248) 246-7878, www.crdn.com

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