Fire Chasing: Why More Restorers Are Doing It

In the early 1990s, my restoration company was on approved vendor programs of several of the largest insurance carriers serving Southern California. We were getting a large volume of claims that kept four estimators busy seeing 3-5 losses each per day. Most of these jobs tended to be water damage claims under $10,000 and rarely did we get a shot at a big fire. This was because most of the larger residential and commercial fire losses were being signed up by my competitors, public adjusters, or the large loss adjusters were giving the best jobs to the contractors who wined and dined them the most.

Those who chased fires would often show up in the middle of the night to offer board-up services before the insurance companies even knew their insured’s had a claim. Contractors that worked with PA’s would get the board-up and emergency services, then bring in a PA to defend the loss from insurance carrier vendors like me. These contractors basically used PA’s to guard their jobs so they wouldn’t get their contracts cancelled.

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One trick PA’s used was to sign up a loss and purposely not turn in the claim until after their 3-day right to cancel expired. This prevented the insurance agent or adjuster from trying to convince their insureds to cancel the contract with the PA.

Then around 1995 I got tired of doing free estimates on jobs I couldn’t get and seeing all the good work going to my competition, so I decided to build my own chasing team and hit the streets. It didn’t take long before I started getting more fires than I could handle. Initially, this upset some adjusters, mainly because they couldn’t refer their boys in once I had the job signed up and I wouldn’t play by their rules. From time to time, I would even work with PA’s, so I worked for a while on both sides, cherry picking the best jobs on the insurance side and chasing select fires on the other, which turned out to be the most profitable arrangement for me at that time.

None of my competitors that worked exclusively with insurance companies dared chase fires and sadly since 1992, I know of at least 53 restoration companies that have either gone bankrupt, moved out of state, or got out of the restoration industry altogether. Granted, not every one of these companies shut down as a result of being mistreated by insurance companies, but the most common denominator was directly tied to sales volume, cash flow, and project profitability.

Today, restoration companies across the U.S. are experiencing the same symptoms and many are starting to integrate chasing as a way to augment their sales.

It’s What You Know, Not Who You Know

I am often asked how fire chasers get their leads and how they are able to get information on property owners, so let me share a couple trade secrets. If you had a fire in your home, the first thing you would do is call 911. Once you get the emergency operator on the line, you will tell them your name, address, and what the nature of your emergency is about. Then, since you are calling about a fire, the 911 dispatcher will relay your address and other information over the radio to the fire department. This is where people who chase fires get most of their leads.

Using radio scanners, mobile apps such as Pulse Point, or incident notification services, they take the information and address provided by the dispatcher and run it through computer databases known as skip tracing software. This is the same type of software that is used by bounty hunters, debt collection agencies, and private investigators.

Armed with this information, fire chasers know everything they need to know about you, including the name on the property title, when it was purchased, where the property tax bill is sent, who holds the mortgage and how much is owed, cell phone numbers, family member details, and a wide range of other personal information. This information gives the chaser the ability to search for any type of common ground to build a relationship on and deploy the right salesperson who might have the best shot at getting a contract signed.

Benefits of Chasing

Statistics provided by the National Fire Protection Association show that fire departments responded to about 1,291,500 fires in 2019 that caused an estimated $14.8 billion in property damage. This doesn’t take into account fires where more than one home burned in a condominium complex or wildfires where hundreds of structures can be lost in one event.

Structure fires are not the only jobs you can get by chasing. Other losses may include vehicles that crash into structures, accidental fire sprinkler discharges (which can create huge water losses) trees that fall on homes or buildings, high rise floods, etc.

There is no question that chasing fires can be very lucrative if it’s done right. However, a successful chasing program depends to a certain degree on how many structure fires occur in your area. Even if fires only happen occasionally, there are a number of advantages to having a direct sales team respond to an emergency any time day or night. Here are some advantages:

1. You can have the first shot at the board up and emergency services, which usually puts you in the position to get the contents packout, cleaning, and reconstruction.
2. You can pick and choose what jobs you want or what portions of a job you want. Here you can go after commercial, restaurants, schools, apartments, single family homes, or just emergency services, it’s all up to you. Unlike program work where you are forced to take what you are given, whether it’s profitable or not and still have to pay a fee to the program.
3. You can work with public adjusters who can refer you on fires, floods, and all sorts of other types of large property damage claims. Although PA’s take a percentage of the job, they will fight for your estimate versus cutting your estimate down.
4. When times are slow or if you don’t want to do program work or pay plumber’s referral fees, chasing can prove to be a viable way to supplement your sales.
5. Chasing can be a great way to meet large loss adjusters. I actually landed some of my best accounts this way.

The Downside of Chasing

It’s interesting that some in the restoration industry frown upon chasing fires yet have no problem storm chasing or deploying their resources and manpower to hurricane or tornado-stricken areas, which is no different than chasing fires. As with any business venture, there are always risks and drawbacks. Here are a few regarding chasing:

1. Sometimes there may not be any fires for weeks or months. Frequency of structure fires can be seasonal and there tend to be more fires in fall and winter months than in summer.
2. Some property owners are offended by fire chasers showing up in the middle of the night or right after the fire department leaves the scene. This environment requires a carefully planned strategy and a specialized type of sales team. Sometimes getting a contract signed can be very challenging.
3. Some insurance companies forbid their vendors from chasing. This may cost you accounts or force you to choose which side you want to be on.
4. In general, fire chasers have a bad reputation and this is for good reason. There are tons of stories all over the internet of fire and storm chasers victimizing people and there are a lot of unsavory people out there. It takes considerable effort to separate yourself from the bad guys.
5. Most restoration companies need a combination of large, medium, and small size losses to keep the cash flow healthy. Chasing fires, especially the reconstruction phase can put a significant strain on cash flow, especially when mortgage companies limit how much they will pay before completion. This is why it is crucial to vet and prequalify every job before you sign a contract.

I believe there are a lot of honest restoration companies out there that never get a fair shot at the larger or high-profile losses in their communities. Sometimes taking a leap of faith and stepping out of your comfort zone to try something like chasing can open the door to untapped opportunities and unlimited earning potential.