Property restoration firms starting to feel like collision repair centres: RCOC

Restoration contractors who clean and repair damaged properties are starting to encounter problems similar to those of auto collision repair centres when dealing with insurance carriers, suggests the president of the Restoration Contractors Organization of Canada (RCOC).

RCOC president Kyle Urech, a former adjuster, suggested to RCOC members this week that many auto repair facilities have gone out of business because they can no longer make a profit, and restoration contractors are also worried about their survival.

“They are dictated to by the insurers,” Urech said of the collision repair shops. “For a lot of them they can’t even go out and buy their own parts and materials. They have to go to the insurance company portal and order it that way.

The insurance company makes the margin on those parts. Not the auto body repair facility. The repair shop makes a 6% handling fee. What has resulted? There’s a very adversarial relationship with insurance companies. They are fighting all the time.”

As a result, he added, when claimants get their cars repaired, they often feel as if they are in a “tug of war” between the collision repair centre and the insurance carrier.

“It kind of sounds familiar, doesn’t it?” Urech said to a room full of executives from restoration contractors. “It sounds like what the restoration industry is going through right now.”

Urech made his comments on the second day of RCOC’s two-day exposition and AGM in Niagara Falls. The organization, which as of Monday had 35 members, was founded two years ago by Winmar, Canadian Disaster Restoration Group (CDRG), DKI Canada (originally known as Disaster Kleenup), BELFOR, FirstOnSite Restoration, Service Master of Canada, First General Services Ltd. and Paul Davis Systems.

Executives from some of these firms and others in the same industry attended the event, which was RCOC’s first AGM. Urech noted many restoration contractors are concerned that their costs are rising but the revenues from insurance claims are either flat or not increasing as quickly as the cost of materials and labour.

“They like being in this business and helping clients restore lives and there’s a lot of personal satisfaction … but they’re worried about their own survival and that of the industry.”