When you suffer a property loss at your business or home, your insurance company sends one of its adjusters to evaluate the damage. This insurance adjuster makes a preliminary determination of the cause of the loss and what your payout will be.
When the property damage claim involves items such as hardwood flooring, carpeting, siding or roofing, an insurance adjuster will often send a sample of the damaged material to an independent testing lab for analysis. The goal of having such a lab test the materials is to produce accurate pricing for the lost items and to find the best available match for replacement materials. After all, this information is the basis of a fair settlement.
In our experience as public adjusters, this analysis typically happens at ITEL, the nation’s leading independent testing lab. We most often encounter ITEL on losses involving large areas of carpet.
Xactimate – the software system that serves as the insurance industry’s standard program for estimating the cost of repairs and reconstruction for residential and commercial structures – offers only a few options for determining replacement costs for certain materials. In the case of carpets, for example, these options are limited to one of four “grades”: Standard, Average, High and Premium. Because costs vary so significantly between grades, insurers increasingly elect to use ITEL rather than guess which grade is most applicable to the damaged carpet involved in the claim.
How does ITEL function?
The insurance adjuster will take a small sample of one of the damaged products – e.g., carpet – and then sends it to ITEL for an analysis of materials and cost. ITEL sends back the test results within 24-48 hours after conducting the tests.
And this is where things get interesting.
As PAs, we often see a very large discrepancy on carpeting costs. The insurance adjuster might send damaged carpet to ITEL that has a manufacturer’s logo stamped on the back, and ITEL will send back an analysis based on a product made by a completely different manufacturer. We also see situations where we send in a claimant’s wool carpet, and ITEL responds with the conclusion that the carpet is actually not wool at all.
What the heck?!?
Believe it. In upcoming posts, we will provide real-world examples of ITEL analyses that are totally out of whack with our own assessments, and how we resolved these seemingly impossible differences on behalf of our clients.