Howard Wolf and Monica Aquino – Restoration Insurance Issues, The Revised S500 and More!

Air Date: 5-20-2016| Episode: 415

This week on IAQ Radio we welcome two industry veterans to discuss their take on how restoration claims management should be be handled, how the revised IICRC S500 fits in, when and how projects go legal and more…

Full Description:

This week on IAQ Radio we welcome two industry veterans to discuss their take on how restoration claims management should be be handled, how the revised IICRC S500 fits in, when and how projects go legal and more. Howard Wolf has been involved with the cleaning and restoration industries since 1984. He has worked his way through a series of progressively more responsible positions in the industry and has responded to large losses since Hurricane Andrew in 1992. Mr. Wolf has also always been deeply involved in the industry as a volunteer, currently, he is the Chairman of the IICRC Standards Committee, an accredited ANSI writing body. In 2001 Mr. Wolf started HW3 Group, LLC, a firm committed to serving the restoration industry. HW3 Group is a firm that supports the disaster restoration industry with management, administration, claim preparation, logistics, dispute resolution, and technical expert consulting. Monica Aquino is the Managing Partner of HW3 Group, LLC. She has been involved in the claims preparation and claims management industry since 1999. She began as an analyst and claims coordinator, and then moved into claim management and development of programs for large clients. Monica has managed claims for some of the largest property claims in the country and has particular expertise in the hospitality, complex multi-tenant and large retail industries. Monica has managed claims with values up to and exceeding $500M. She leads teams in preparing claims analyses for various aspects of the claim, interfaces closely with clients to understand loss damages/business needs and collaborates with insurer representatives to present claims and request partial payments until final settlement is negotiated. Her perspective on these issues is one our listeners will appreciate and learn from.

Z-Man’s Blog:

Protect the asset

Monica Aquino studied accounting in college and fell into claims management where she has worked for 18 years. Howard Wolf has been involved in the cleaning and restoration business since 1984. Monica and Howard now work together at HW3 Group where she is the managing partner. The firm offers a broad range of services to building owners, insurance brokers and restoration contractors. Their mission is to use the policy to make the client whole and “protect the asset”. In the event of a claim, they will be the hub of the wheel. They plan to be first onsite. Document and prepare the claims package. Package the claim for the adjuster. Expedite claim submission, speed funding to pay for the work that needs done. All communication will flow through them to protect the owner from day 1 to completion of settlement.

Nuggets mined from today’s interview:

Policyholder is entitled to have claims representation.

Claims management is a needy business. Successful practitioners need to “be all in” or get out.

Most property owners are unfamiliar with how the claims management process works. Monica educates property owners and their internal departments on the claims process and works with insurance brokers, risk managers and underwriters.

Difference between Claims Manager (CM) and a Public Adjuster (PA). PA’s are incentivized by earning a piece of the aggregate claim. CMs charge hourly. Many insurance policies may pay for CM services and will not pay for PA. The relationship between CMs and insurance carriers isn’t adversarial.

They are believers in the insurance process and doing the right thing.

Third Party Administrator (TPA)is a unique term with no definition. Formally known as “vendor program work” morphed into TPAs. TPAs may be owned by adjusting firms, contracting networks, or other carrier-managed programs and have conflicts of interest. There are only a few true administrators represented by a disinterested third party.

Work example:

They are currently onsite in Atlanta working on a fire in an entertainment venue. Howard was initially called to the loss by a restoration contractor because he knows the experts for the oddball stuff. The fire was caused by a pyrotechnic accident which ignited a rooftop HVAC package unit. The reconstruction cost is in the range of $80K construction and the cleanup $500K. The facility is a test site for Bose concert equipment. It’s a complex claim with multiple insurance carriers and adjusters involved. While onsite Howard met the property owners who recognized their vulnerability and HW3 Group was hired to take over the claim management.

Monica takes over. Part of the responsibility is identifying who is responsible for paying for what before the bills arrive and lining up whose paying for what.Having the “power of the owner”gives HW3 a seat at the table. She’ll needto properly document, package and submit the claim to ensure prompt and proper payment.She has the knowledge, skills and personality to defuse a potential time bomb.

There is another concert scheduled at the venue in a week, and much work needs to be completed to avoid business interruption claim.

Two important tips for property owners:

  1. When purchasing insurance some policies have coverage or entitlement for professional fees. Check your policy and determine if it includes claim preparation/professional fee coverage. If not, request it at policy renewal.Sometimes, it’s thrown in and available at no charge, other times its available at minimal cost.
  2. Savvy property owners will request an adjuster be preassigned.

Important tip for restoration contractors:

There are laws which oversee payments for property damage. Restoration contractors have difficulty obtaining prompt payment, because sending their invoice to an adjuster doesn‘t start the timeclock. The timeclock only starts after the insured presents the claim.

Raising awareness:

Small changes can result in big results. Monica uses a flowchart to teach restorers the claims payment process. Proper flow of claims information and a properly prepared claims package through the owner to the insurance carrier expedites the claims payment process. By knowing and following the proper process restorers can avoid discounts and cuts to their invoices. Contractors and restorers should be educated in speaking the language and use the correct terminology. Howard provides guidance on industry standards and good practice procedures.

Standards  S500 held up well in court as a standard of care.

S520 is growing in popularity, reasonableness way it is written.

RadioJoe, passed on legal advice from an attorney. Follow a standard, stick to it and be able to defend it.

80% of the restoration contractor court cases involving industry standards center around demonstrating contractors were reasonably prudent. Can they demonstrate through documentation that they prudently practiced a reasonable written standard of care and can defend their decisions and actions?

A weakness of the 2006 document was that Psychrometry and Drying Technology were segregated into separate chapters and the Inspection chapter didn’t follow the work flow well. In the new document, the Psychrometry and Drying Technology chapters have been combined and now the Inspection and Structural Restoration chapters complement one another.

The Structural restoration section went back to its roots, inspect and clean first before structural drying. Proper order of workflow. How to use and when to apply antimicrobials. The new focus is on the project not the owner or contractor.

The prior versions lacked references and citations. The new document is better referenced and cites better sources: university research, physical science documents, manufacturer research.

Consensus body taught a standard of care seminar to IICRC instructors.

Considerable practiced based information remains in the document.

The new S500 document follows work flow processes better.

Outsider now insider opinion on standards – Monica’s prior experience was with risk managers, brokers and owners and she finds industry standards fascinating. Some insurance policies mandate that IICRC standards must be followed.

Some very good advice, paint a picture – The person at the insurance company who signs the check for the work you are doing won’t set foot on the job; so you must paint a picture. Document what happened, how hand why. What did you do and why did you do it. This information makes the check writer feel comfortable.

Important observation – Restorers take classes, get certified, buy standards and are confused when they go into the field. What restorers do in the first 24-72 hours after a claim determines how difficult it will be to settle the entire claim.Water damage claims are subject to interpretation. A growing number of restorers and techs don’t know how to classify the claim, or do not comply with the standards for the project after they make that determination. As an example, many restorers will submit paperwork statinga Category 3 water damage determination, yet perform the work without proper tools and equipmentand invoice the project inconsistent with their initial determination. Restorers do not realize or comprehend that incorrect classifications of water damage has a greater impact beyond the restorer’s bill. It can affect the entire claim, especially if the restorer performed and billed the work differently.

Many consultants who coach and train insurance companies on IICRC standards who haven’t been involved in the IICRC standards development process, or haven’t been educated on the changes, are unqualified and spreading misinformation.

Some IICRC instructors are parroting and spreading water damage hearsay and assumptions. The IICRC has instructional videos on changes in the standards posted on YouTube and sponsored an instructor training clinic where instructors could pose questions to the consensus body. The training clinic video will be available on the IICRC Standards subscription site. A subscription can be obtained at

Monica’s final thoughts:

The lines are blurred as to who represents who?  Raise awareness on decision making. Empower owners.


Focus education on the process. Bring back what’s been forgotten, the basics.

FYI, the Z-Man stopped teaching water damage when the IICRC complicated training by mandating the teaching of “MUS”. Since then things have gotten worse. The restorers and techs Monica and Howard mentioned who can’t classify the claim and are confused likely hold multiple IICRC water damage certifications and own copies of the standards. The reason they are confused is that unscientific instructors are trying to teach a combination of scientific stuff and “made up stuff” to unscientific technicians.

Today’s music: Project Manager Blues, written and sung by Frank Saladis You Tube

Z-Man signing off


What incident resulted in the highest level of insurance claims filed since 911?


Japanese tsunami and earthquake