Managing Contents When a Claim Becomes a Total Loss

Summary

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Podcast Summary: Managing Contents When a Claim Becomes a Total Loss

Property & Casualty 360 Perspectives Podcast
Air Date: June 9, 2026
Host: Nikki Howell (with guest David Gavilanes, Blue Kangaroo Packouts)

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Episode Overview

This episode focuses on the complex and often misunderstood process of managing contents in property insurance claims that become total losses. David Gavilanes, Training Manager and Regional Business Coach at Blue Kangaroo Packouts, shares actionable strategies and best practices for both claims professionals and vendors. The discussion centers on effective documentation, the importance of clear communication with insureds, and how emerging technologies are improving the total loss claim journey.

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Key Discussion Points & Insights

1. What Constitutes a "Total Loss" in Contents Claims

• Not Always Completely Destroyed:
  Items may be declared a total loss even if not totally destroyed—often it is not cost-effective to restore them, based on contamination level, replacement costs, or policy limits.
  • “Something that is typically misunderstood is that the item may not be completely destroyed... that's all based on factors like contamination level, cost of the item, and just perhaps the policy limits that customer is dealing with.” (A, 00:03 / 03:45)
• Major Shift to Documentation:
  When a claim is a total loss, focus moves from restoration to comprehensive documentation: inventory, value estimation, chain of custody, and disposal authorizations.
  • “When a project turns completely to total loss, that's when the restorer's ability to document outweighs your ability to restore.” (A, 01:49)

2. Common Misunderstandings Among Insureds

• Misjudging Salvageability:
  Many clients believe only completely destroyed items are totaled, not realizing cost and contamination factor in.
• Expectation Setting:
  Early, clear explanations of what gets totaled versus restored help minimize confusion and frustration.

3. Managing the Emotional & Logistical Challenge

• Allowing Time for Review:
  Rushing content disposal risks losing items of sentimental value. Best practice: slow down, foster communication, and let insureds review inventories.
  • “Even if it's not recoverable and if it's something they want, they want to hold on to, one of the worst things that we can do... is rush to throw it all out.” (A, 05:07)
• Collaboration:
  Keeping both insureds and adjusters informed, especially around sentimental or disputed items, is crucial.

4. Common Points Where Claims Stall (and How to Prevent Delays)

• Burden on Insureds:
  Problems arise when insureds are made to itemize total losses themselves. This can overwhelm them and slow the process.
  • “Some of the biggest delays... happen when the burden is put on the insured. Sometimes... it's the insured's responsibility to come up with their own list... That can be quite a burden...” (A, 06:43)
• Role Clarity:
  Confusion over vs. vendor and adjuster responsibilities can stall progress. David emphasizes establishing clear expectations early.
• Review/Sign-Off Loops:
  Delays occur if the insured doesn’t review and sign off the compiled inventory—ensure all parties are in the loop.

5. Navigating Changing Item Status

• From "Cleanable" to "Unsalvageable":
  Some items are initially categorized as recoverable but later become non-salvageable after attempted restoration. It’s important to explain this possibility upfront to avoid surprises.
  • “A common example... you might have had a favorite coffee mug or glassware that's been in your cupboard for years... there are times when some items are perceived as recoverable, but the reality is... it just won't be recovered, it'll be non salvaged.” (A, 08:58)

6. Role of Technology and Opportunities for Improvement

• AI & Automation:
  Recent advances in inventory software, especially AI that identifies and itemizes contents via camera, have sped up documentation and reduced manual effort, though checks for accuracy are still needed.
  • “A lot of the inventory softwares... have adapted to AI technology which recognizes the items on the camera lens. So it speeds up the process of creating the total loss inventory.” (A, 10:10)
• Redundancy Helps:
  Multiple records (digital inventories, 3D scans, and photos from insureds) make documentation more reliable and defensible.
• Continued Adaptation:
  Emphasizing the continued need to adopt new tools and technologies to deliver better, faster outcomes for all parties.

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Notable Quotes & Memorable Moments

• On patience and empathy:
  “One of the worst things we can do as vendors is rush to throw it all out... by slowing down... we can guide them through that process, give them time to review our inventory...” — David Gavilanes (05:07)
• On technology's impact:
  “The more that restorers adopt that technology, the more that's going to help... Redundancy in this industry on the content side is not a bad thing.” — David Gavilanes (10:10)
• On the importance of clear upfront communication:
  “As long as those expectations are clear at the beginning, we can typically move things along without any issue.” — David Gavilanes (06:43)

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Key Timestamps

• 00:03 – 03:45: What a total loss really means; common misunderstandings among insureds
• 04:50 – 06:32: Steps vendors can take to prevent overwhelm and preserve items of value
• 06:43 – 09:57: Where claims stall, ways to prevent delays, and the importance of burden sharing
• 10:10 – 11:36: Opportunities for industry improvement—AI, inventory software, documentation redundancies

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Conclusion

The episode underscores that while total loss claims are difficult and sometimes emotional for the insured, successful management depends on vendor patience, comprehensive documentation, and clear communication from all parties. The adoption of advanced technology is already transforming the process for the better, but people skills and empathy remain equally important for a smooth total loss claim journey.

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Transcript

[A]

Something that is typically misunderstood is that the item may not be completely destroyed. You know, there might be a decision to total loss the item just for the mere fact that it's not a, it's not cost effective to restore and return to the insured. And that's all based on factors like contamination level, cost of the item and just perhaps the policy limits that customer is dealing with.

[B]

Hello everyone and welcome to our latest episode of the Thought Leadership podcast series hosted on Property Casualty360 and sponsored by Blue Kangaroo Packouts. I'm Jeffrey Metz. In this episode, we'll talk with David Gavilanes, training manager and Regional Business Coach at Blue Kangaroo Packouts, on the impacts of good vendor execution on a total loss claim. When the unthinkable happens, insureds can be overwhelmed by the process. And to make things whole, especially in a total loss situation, the overall experience and a timely resolution can be contingent on a strong relationship with the content restoration vendor who can ensure things like documentation and expectations don't create unnecessary delays. Let's hear Gavilana's details, some of these key points as well as the role of technology in moving the restoration process along in this conversation with Nikki Howell.

[C]

David, thank you so much for joining us today. Today, how are you?

[A]

I'm well, how are you?

[C]

I'm good, thanks for asking. Well, I'd like to kick things off here by really understanding when insurers classify a claim as a total loss, how does that change the contents restoration process and what exactly does that change mean for everyone involved?

[A]

The change is pretty significant because the emphasis on documentation becomes that much greater On a contents project where recovery is the goal, we have everything in hand and so it's a matter of us taking possession, cleaning the contents, making the restoration happen, and then returning everything. When and on every project there is some total loss that happens. But when a project turns completely to total loss, that's when the restorer's ability to document outweighs your ability to restore. So it's documentation and getting that information back to the insured and their carrier. What that entails is an accurate inventory with, you know, when it's requested, some valuation support, and a good chain of custody and disposal authorizations. So, and it takes a little bit of time to, you know, make the evaluation because sometimes the contents can be located in the part of the house or the structure that's been heavily damaged. So in those cases you might need assistance from the homeowner, which only adds time to the process. So you're working with a homeowner to identify things that otherwise can be, you know, almost impossible to figure out. So it becomes a very heavy documentation job. And that is something that the vendor on the project has to be very patient in dealing with. So it's a completely different process when that happens.

[C]

Yeah, that makes sense. And so what do claimants typically misunderstand about a total loss situation, and how exactly does that impact the outcome of the claim?

[A]

Something that is typically misunderstood is, is that the item may not be completely destroyed. You know, there might be a decision to total off the item just for the mere fact that it's not a. It's not cost effective to. To restore and return to the insured. And that's all based on factors like contamination level, cost of the item, and just perhaps the policy limits that that customer is dealing with. So how those decisions are made can something that needs to be understood by the insured as well. Our process is to go in and make an evaluation, start with the event zone, and kind of work away back from there. Typically, things that are closer to the source of the event become total loss. And that's part of the conversation that we often have with our insureds. We let them know that and give them that expectation. And so as long as they have a good understanding of what we're looking for, I think we can mitigate those misunderstandings.

[C]

Yeah. So I know there can be a lot of complexity, and I'm just wondering, what steps can a restoration professional take to keep a total loss claim moving forward when claimants might feel naturally a little bit overwhelmed by the process?

[A]

So what we're going to do is we're not going to rush anything. And this is probably most important on total loss claims, because one of the things that happens is there might be a rush to identify everything, get a disposal authorization, and get it in the dumpster somewhere. Right. But the insured needs time to review the list and see if there's anything that means anything to them. Family heirlooms, anything with sentimental value. So even if it's not recoverable and if it's something they want, they want to hold on to, you know, one of the worst things that we can do as vendors is, you know, rush to, you know, throw it all out. So, you know, by slowing down, I think we can, you know, guide them through that process, give them the time to review our inventory, what we've created for the inventory, and give them the opportunity to say back to us, you know, is there, you know, what is it that you want to keep? And we'll work to, you know, clean it up as best as possible. It's not going to be perhaps cleaned to pre lost condition, otherwise, you know, it would be classified as restorable. But getting those things back to a homeowner that means something to them is important. And then but also keeping their adjuster in the loop as to, you know, what they're going to hold on to as well.

[C]

So where would you say that total loss claims most commonly stall and what should insurers do to prevent some of those delays before they start?

[A]

From what I've seen, some of the biggest delays on total loss claims typically happen when the burden is put on the insured. Sometimes depending on carrier guidelines or policies, it's the insured's responsibility to come up with their own list of what was lost on either the fire or water loss. And that can be quite a burden to put on the insured. So I would suggest, you know, as often as possible to bring in a vendor to assist with that process because we're equipped with the software to make the itemization and in some cases we can even provide valuation services when it's requested of us. I think, you know, totalhost claims will also stall when there is kind of a confusion of responsibility for, you know, who's doing what and for, you know, who is making the inventory and disposal aspect of it. As long as those expectations are clear at the beginning, we can typically move things along without any issue. But also the review of the information, if the total loss evaluation is, you know, made and itemized and forwarded to the adjuster and not reviewed or signed off by the insured, then that can create some issues down the line for the insured as far as we know how they're compensated for us as far as, you know, getting the thing closed on our side. So being clear about getting that documentation to all parties is super important. And one final thing is I think that the insurance should also have a good understanding at the onset of what happens when something that we feel is recoverable but later on we discover that it's not. And this is not uncommon where so on a loss we'll inventory and categorize things as either cleanable or non recoverable. So sometimes an item can be cleanable and we'll take it back. And in our attempt to clean we'll discuss, discover this is actually too delicate or the cleaning process might be too aggressive and the item won't be able to withstand cleaning and then it gets moved over to the non salvage list. And that's just Something I always like to discuss with a homeowner because there'll be, there may be items that you know, someone has had for a number of years or decades. And a common example I give is that, you know, you might have had, you know, a favorite coffee mug or glassware that's been in your cupboard for years and years and years. I know I have those pieces in my home. And that being said, it wouldn't surprise me if I were to put it in as a dishwasher one day and it broke just in the wash. And so there are times when some items are perceived as recoverable, but the reality is that because of the age and fragility of the item, it's, it just it won't be recovered, it'll be non salvaged.

[C]

Yeah, that's good advice. Now, as we look forward a bit, where do you see some of the biggest opportunities to improve how the industry handles total loss claims? And also what do you think it will take to get there?

[A]

So we've seen improvements even most recently, a lot of the inventory softwares that restoration companies utilize have adapted to AI technology which recognizes the items on the camera lens. So it speeds up the process of creating the total loss inventory. It, you know, it'll populate the description. But that being said, you know, you still have to go back and check for accuracy and make sure that everything is as it should be. The more that restores, adapt that technology, the more that's going to help. Redundancy in this industry on the content side is not a bad thing. So having a digital inventory with software then backed up by a 3D scan of the property is helpful and with the assistance of whatever pictures that the homeowner may have of, you know, whatever property you know, were under possession prior to the loss is also helpful. So there's a few things that, that are being done right now to help the process along and all we can do is try to adapt and adopt the technology. So the more we do that, the more on pace we'll be with helping bring these claims along and to it's to their satisfactory conclusion.

[C]

Yeah, I can see how that would be super helpful. David, thank you again for joining us today. There's lots of great insights here and we really appreciate you sharing them.

[A]

You're welcome. It was my pleasure.

[B]

That concludes this episode in the Property Casualty 360 Thought Leadership podcast series presented today by Blue Kangaroo Packouts. I'm Jeffrey Metz. Thanks for listening. For other podcasts in this series as well as more as the latest coverage on claims in the property and casualty insurance sector, go to propertycasualty360.com.