# Chapter 10 — Restoration Industry ## The chapter in one line Restoration work — storm, water, fire, rebuild — is high-ticket, repeatable, and funded by insurance. It pays well, if you understand how the game is played. > **Disclaimer:** Educational only. This is **not** legal advice and **not** public- > adjusting advice. Insurance claim rules and public-adjusting laws vary by state. > Do not represent a homeowner against their carrier or "negotiate the claim" unless > you are properly licensed to do so. Stay in your lane as the contractor — confirm > what you can and can't do with your state's rules. --- ## Let me tell you the truth Most contractors are leaving serious money on the table because they don't understand restoration work. They see "insurance job" and get nervous — adjusters, paperwork, terms they don't know — so they stick to cash jobs and stay small. Here's what they're missing: restoration is some of the best work a contractor can do. The tickets are large. The work is repeatable. And the money doesn't come out of a homeowner's tight personal budget — it comes from an **insurance claim.** A homeowner haggling over $1,500 of their own money is a different animal than a covered loss where the carrier is funding the repair. Restoration rewards the contractor who **understands the process and documents everything.** It punishes the one who doesn't. This chapter teaches the process. ## The types of restoration work - **Water damage** — burst pipes, leaks, appliance failures, flooding. Extremely common, often urgent. - **Storm damage** — wind, hail, fallen trees, roof damage. Seasonal surges. - **Fire damage** — fire, smoke, and the water used to put it out. Large, complex losses. - **Rebuild** — putting the structure back together after any of the above. ## Mitigation vs rebuild — two phases, two jobs This is the first thing to understand. A restoration loss usually has two phases: **Mitigation** is the emergency work — stopping the damage from getting worse. Water extraction, drying, tarping a roof, removing ruined materials, treating for mold. It's fast, it's urgent, and it happens first. **Rebuild (reconstruction)** is putting it back — drywall, paint, flooring, trim, the actual repair of the home. Some companies do only mitigation, some only rebuild, some both. Know which phase you're being called for, and know that they're scoped and paid differently. ## The players — who's who - **The carrier** — the insurance company that holds the policy. - **The adjuster** — the person who inspects the loss and writes the carrier's estimate of what's owed. Can be a staff adjuster or independent. - **TPA (Third-Party Administrator)** — a company some carriers use to manage claims and assign contractors. Some restoration work flows through TPA programs. - **The homeowner** — your customer. They own the claim and the deductible. - **The mortgage company** — often named on insurance checks (more below). - **You, the contractor** — you do the work and document it. You are *not* the homeowner's claims representative unless you're licensed for that. ## The money words you must know This is where contractors get lost. Learn these cold: - **ACV — Actual Cash Value.** The depreciated value of the damaged item — what it's worth today, after age and wear. The first insurance payment is usually ACV. - **RCV — Replacement Cost Value.** What it costs to actually replace it new. - **Depreciation** — the gap between RCV and ACV. With a Replacement Cost policy, this is often **recoverable** — the carrier releases it *after* the work is completed and documented. So payment typically comes in stages: an ACV payment up front, then the recoverable depreciation released on completion. - **Deductible** — the homeowner's portion. The homeowner owes this; it is not yours to "eat" or waive (waiving deductibles can be illegal — know your state's rules). - **Scope** — the detailed line-by-line description of all the work the loss requires. - **Supplement** — additional scope and money requested when the original estimate missed something or hidden damage is found once work begins. - **Xactimate** — the estimating software the insurance industry runs on. Adjuster estimates are typically written in it; knowing how it reads is a real advantage. - **Mortgage company checks** — if there's a mortgage, the lender is often named on the insurance check and the funds must be endorsed/released through them. This affects *when* you actually get paid — plan for it. ## How the contractor actually gets paid Walk the flow so it's not a mystery: 1. The loss happens; the homeowner files a claim. 2. The adjuster inspects and writes a scope/estimate. 3. The carrier issues the first payment — usually **ACV**, often with the mortgage company involved. 4. You do the work — and **document everything.** 5. You **supplement** for anything the original scope missed or any hidden damage. 6. On completion, with documentation, the carrier releases the **recoverable depreciation** (and the homeowner pays their **deductible**). Get this: restoration pay is staged and it rewards patience and paperwork. The contractor who documents thoroughly and supplements properly gets paid fully. The one who doesn't leaves money on the table or fights for it. ## Documentation is everything In restoration, **if it isn't documented, it didn't happen** — at least not as far as the carrier is concerned. Photos of every area, before and after. Moisture readings. Notes. The scope in detail. Documentation is how you justify the scope, how you support a supplement, and how you get the full payment released. This ties directly to Chapter 14 (Jobsite Documentation) — in restoration it's not optional. ## Stay in your lane One serious warning: as the contractor, your job is to **do the work and document it.** Negotiating the claim *on behalf of the homeowner* — acting as their advocate against the carrier — is **public adjusting**, and it's a licensed activity with rules that vary by state. Don't cross that line. Don't promise to "handle the insurance company" or "get the claim approved." Be the contractor, write your scope, document your work, supplement properly for what the job genuinely requires — and let licensed professionals do licensed work. ## Why this matters Restoration can be one of the strongest niches a contractor can build (Chapter 8): - **High ticket** — losses are large. - **Repeatable** — storms and water losses never stop. - **Insurance-funded** — less price-haggling with a homeowner's personal cash. - **Partner-driven** — insurance agents and adjusters become referral sources. It's a niche with real depth — enough that it can become its own advanced mini-course. ## Common mistakes - **Avoiding restoration** out of fear of the paperwork. - **Under-scoping** — missing damage and never supplementing for it. - **Weak documentation** — no photos, then no leverage and no full payment. - **Misunderstanding ACV/RCV** — thinking the first check is the whole job. - **Forgetting the mortgage company / deductible** in the payment plan. - **Crossing into public adjusting** without a license. ## A real example > --- > **From Dexter's career — the $19,000 bet that built everything.** > > Before I tell you this, let me say something directly. This chapter isn't theoretical. I lived it. > > Early in my career, a tree fell on a house and damaged the garage. I got the job. I knew construction like the back of my hand — so I did the work, and I did it well. Then, after it was finished, I sat down with the homeowner and had a conversation. And in that conversation, I realized something that hit me hard: I had short-changed myself. Badly. I knew construction. I did not know insurance restoration. And that gap had cost me real money — money that was there to be claimed, that I'd left on the table because I didn't know the vocabulary, didn't know the process, didn't know how to scope and supplement what the insurance industry owed. > > I knew right then I had to get proper training. So I searched for a mentor who could teach me the insurance restoration business — TPAs, documentation, Xactimate, terminology, how to scope a loss, how to supplement. Everything in this chapter. I found him. > > Here's the part I want you to hear. That mentor cost me just over nineteen thousand dollars. And this was at a time when I was *not* doing well financially. I could have bought a new truck — I was still driving a ten-year-old Honda Ridgeline pickup. Instead, I wrote that check on myself. > > Why? Because I wanted work that didn't depend on a homeowner collecting three to five bids and making me wait months to hear back. I wanted work that paid well regardless of the season, that held up in the economic valleys, that didn't dry up when people stopped spending. I wanted insurance restoration that badly. > > That $19,000 returned many times over. Not because I got lucky — because I learned the process, documented everything, and stayed in my lane while doing the work right. > > This chapter is what I paid $19,000 to learn. You got it in the price of this course. > --- I wasn't doing well. I was driving a ten-year-old Honda Ridgeline; I could have bought a new truck. I bet the money on myself instead. It was the best money I ever spent — and the part of it that's still relevant is in this chapter. Don't short-change yourself the way I did. Learn this material in and out before you price an insurance job. A customer — and an adjuster — can tell when you're bluffing. ## Your action step Before Chapter 11: 1. Decide if restoration will be a niche for you (revisit Chapter 8). 2. Learn the vocabulary cold: **mitigation, rebuild, ACV, RCV, depreciation, deductible, scope, supplement, Xactimate.** 3. Begin a relationship with at least one **insurance agent** or restoration- experienced contact. 4. Confirm your **state's rules** on what a contractor can and can't do on a claim. 5. Commit to **photo-documenting every restoration job** start to finish. Use the **Restoration Job Checklist + ACV/RCV Flow Diagram** in this chapter's downloads. ## Where this connects Restoration — and every other job — lives or dies on one thing: the estimate. If you scope and price it wrong, no amount of good work makes it profitable. In Chapter 11, we get serious about estimating. > **Remember:** Restoration pays well and never runs dry — but it rewards the > contractor who knows the process and documents everything. Do the work, write the > scope, keep the proof — and stay in your lane.