Controlling the scope of a property loss

When it comes to property claims, even the smallest oversights can snowball into huge financial losses. Claim leakage – when more money is used to settle a claim than necessary – is estimated to cost insurers billions of dollars each year.

For property insurers, this leakage often stems from overspending on repairs, mitigation, restoration and other services. More specifically, from inefficiencies or errors that should have been addressed before the claim was resolved. Issues like inflated estimates, inaccurate vendor charges, unnecessary repairs or poor workmanship can end up inflating the total cost of a claim.

Claim leakage isn’t just a problem for insurers. It can also negatively impact policyholders, delaying repairs, eroding their trust and draining resources that could otherwise be used toward essential repairs or replacements. For adjusters, controlling the scope of a property loss isn’t just about managing costs – it’s about protecting the integrity of the claim and driving the very best outcomes from day one.

How adjusters can control the scope

Think of adjusters as the quarterbacks of every claim. They set the pace and lead the charge toward resolution. While they play a key role in driving claim success, even the most experienced adjusters can’t do it all alone. Like any great quarterback, adjusters need a strong team behind them.

To effectively control the scope of a property loss, adjusters should team up with experts who can help assess property damage, evaluate contents loss, manage the repair process and review vendor bills to ensure every decision made and dollar spent is rooted in expertise and accuracy.

Assessing property damage

It’s easier to keep a property claim within budget when adjusters have a strong understanding of the damage that needs to be addressed in the first place. A thorough, expert-backed assessment sets the foundation for a well-defined scope, helping adjusters make smarter decisions and avoid unnecessary costs. Depending on the nature of the loss, adjusters should bring in experts like structural engineers and roofing specialists to help them accurately determine the full extent of damage.

When damage is overestimated, insurers are left paying for work that isn’t necessary. When damage is underestimated, key issues may be overlooked, leaving the property unsafe and leading to costly rework, repeat claims or even disputes down the line. The sooner adjusters bring in trusted experts to assess the damage, the better positioned they are to control costs and drive better claim outcomes.

Evaluating contents loss

Another way adjusters can control property claim costs is by accurately determining the extent of contents loss. When damaged items are undervalued or overvalued, it can lead to delays, disputes and unfair settlements for the policyholder or insurer. Inaccurate assessments not only erode trust – especially if policyholders are left covering replacement costs – but also contribute to claim leakage when insurers make unnecessary payouts.

That’s why it’s important for adjusters to collaborate with contents specialists who can help document losses, validate pricing and make sure the assessment is handled fairly. A detailed inventory and thorough valuation of damaged items ensures policyholders are properly compensated for what they’ve lost and protects insurers from overpaying. It also helps ensure that vendors providing contents restoration or replacement services are paid appropriately for their work.

When all parties agree the assessment is fair, it makes for a smoother settlement and helps the adjuster avoid extra costs.

Managing the repair process

Without the right expertise, managing the repair process can be overwhelming and quickly lead to scope creep. Issues like inflated contractor estimates, repair delays and unjustified use of premium materials can all contribute to claim leakage.

When repairs are more complex, adjusters should work with a building consulting team to ensure the property is repaired efficiently, appropriately and at the right cost. This team may include building consultants, managed repair services, mitigation specialists, forensic accountants, quantity surveyors and more. These experts can help keep the project in scope by:

• Vetting and selecting certified repair contractors to ensure quality work.
• Reviewing and validating contractor estimates for fair and accurate pricing.
• Monitoring repair progress to make sure work is completed on schedule.
• Finding opportunities to cut down on waste and improve project efficiency.

With expert support, adjusters can confidently navigate even the most complex repairs and deliver better claim outcomes for the policyholder and insurer.

Reviewing vendor bills

Adjusters can also control the scope of a property loss by having vendor bills reviewed, especially for high-cost services like mitigation and content pack-outs. Bill review experts can audit invoices line by line to ensure charges align with industry standards, contract terms and the actual work completed. These experts can help adjusters find duplicate charges, inflated rates and extra line items that might have otherwise gone unnoticed and paid without question.

While these errors might seem minor on their own, they add up fast and can significantly inflate the total cost of a claim. By addressing these issues before the bill is paid, adjusters can make sure that every dollar spent is justified and within scope.

Bringing it all together

Claim leakage in the property space can happen quickly and in many subtle ways. But when adjusters have the right experts by their side, they can make smarter, more informed decisions at every stage of the claim – avoiding unnecessary costs for insurers and helping policyholders recover sooner.

At Sedgwick, we have the most property experts in the world, ready to manage every type of loss, from the everyday to the catastrophic. With best-in-class adjusting, building consulting and bill review capabilities, we expertly control the scope of property losses to deliver the best claim outcomes in the industry. To learn more about our property solutions and how we can help mitigate claim costs, click here.