For all of you that have heard about this allegedly great opportunity and new innovative technology with HSG Code Blue Water Mitigation, here is the actual truth about the company.
It all starts off like this:
Code blue is an answering service your insurance company forwards their telephones to. Once a call comes into code blue, a representative takes your information regarding your insurance water damage loss you have had. The Representative then attempts to contact a carpet cleaning company in your area to come to your residence within 2 hours to assist with the claim. The call center representative is unable to let you know if the claim will be covered or not. Once the contractor arrives, they have you sign official paperwork from Code Blue explaining that the services may not be covered by your insurance company, and you may have to pay the entire bill. Of course most insured parties assume they are covered since it is a consent for service form being signed with fine print. The insured party thinks this is a form from the actual insurance company that was given to the contractor for the insured party to sign before work can be started.
Your notice of loss the answering service took then is assigned to a Code Blue Claims representative that has contact with the property owner, adjuster, and contractor performing the work. Remember, non covered work may be already started before the claim is assigned to a Code Blue Claims representative. The claim representative then will contact the contractor to make sure they upload their pictures and moisture readings from the property being worked on, and authorize items being worked on. The claim representative answers any questions about the claim the adjuster or property owner may have. Example questions answered are, Did you receive the fax I sent? When will I be paid. The Code Blue representative claims they are the insurance company's Code Blue department. The claims representative closes the claim files once the contractor sends in paperwork claiming the property is dry. I do not see how the claims representative really adds much benefit to begin with. This information is usually available to any adjuster. Reputable contractors also keep all this information (moisture readings, pictures, etc) in their files. The claims representative just seems like Code Blues B.S. Way of looking like their services are actually needed.
How Code Blue finds their contractors is by allowing contractors all over the United States to sign up to be listed on their provider list by zip code via their website. Now remember, only Code Blue has access to this information, not the adjuster or general public. Apparently Adjusters and Home Owners find it difficult to look in their yellow pages under carpet cleaning to find a contractor in their area. A contractor that charges Code Blue more than another contractor in the area will automatically be lowered to the bottom of the list. Since this contractor is at the bottom, they will never receive claims again. Code Blue is not a free market for all contractors.
How Code Blue Tricks the Insurance Company and Contractor:
Code Blue's smooth talking representatives trick the contractor into signing up for free, and setting low prices for services. The contractor is under the impression they are giving discounts to the actual insurance company so they can be their preferred provider. The smooth talking Code Blue representatives do not tell the contractor the insurance company actually will pay Industry Standard (Xactimate) prices for the loss. Since the contractor is under the impression they are working for the insurance companies claims office through Code Blue, they do not realize Code Blue will inflate the contractor's discounted invoice before it is submitted to the actual insurance company (such as General Casualty or Integrity) for payment.
The payment scam consists of payment being made to the contractor by Code Blue. The actual insurance company never sends a check to the contractor. This allows Code Blue to inflate the invoice prior to being sent to the insurance company. The insurance company then submits payment to Code Blue for the services. The insurance company never is able to see the actual bill or estimate from the contractor, only the inflated one. This method makes it extremely easy for Code Blue to short change the contractor.
Code Blue submits the inflated bill to the actual insurance company for full payment plus an additional $225 claims processing fee for their services. On average, Code blue makes $500 off padding the discounted real bill sent to them by the contractor before submitted to the insurance company for payment.
Since Code Blue is a 3rd party claim management company, I find it reasonable to charge the insurance company the $225 fee for handling the paperwork.in my opinion, it is a scam to short change the contractor $500 or more by misrepresentation. The contractor is under the impression this discount will get them more business from insurance carriers.
This revolutionary, new innovation actually is not any type of new procedure for IICRC Contractors. It is a revolutionary, new innovation that tricks contractors into lowering their prices they charge Code Blue so they can pad the bill to make money off the contractor before it is submitted to the insurance company. Code Blue has NOT invented anything to teach the Carpet Cleaning Industry when trying to dry out a property damaged by water.
Now for this Revolutionary New Innovation in Water Mitigation the Code Blue smooth talking representatives claim. I am not sure what Code Blue's patents are to this new alleged Technology being used in water Mitigation Claims. Code Blue does not manufacture any dehumidifiers, or any equipment regarding water restoration.
Code Blue utilizes IICRC standards which have been the same for about the last 10 years. This technology and standard has been freely available to any carpet cleaning company at their suppliers such as Jon Don, so this is nothing new that Code Blue invented. Most all Janitorial Supply stores will have this technology. There is no charge to purchase this technology. The technology of products used is manufactured by companies such as Phoenix, Prochem, Dri-Eaz, and Injectidry. Again, Code Blue does NOT manufacture any products or equipment. I suppose they could send you a sheet of paper from their copy machine to use to put under a furniture leg on wet carpet.
Code Blue's entire philosophy is drying everything in place. This process does not allow for replacement of your furniture, carpeting, or pad. Since items are dried in place, the carpet is not even pulled up to see if it is a total loss due to delamination. There is no way to know if there is delamination of carpet except by lifting it up to check the back of the carpet. Even wood flooring if it is cupped from water exposure will be dried in place, and not replaced. Dry Wall, paneling, and wallpaper is never removed, even if wet. The consumer is sometimes left with items that should have been removed and replaced.
Code Blue tricks the insurance companies into contracting with them by alleging the insurance company will save thousand of dollars on claims with their New and Revolutionary Technology. Any smart insurance company could easily hire an answering service that can call IICRC water mitigation carpet cleaning companies to perform the work. The IICRC offers a free list of contractors in your area via http://www.iicrc.org.
Any insurance company should be smart enough to know IICRC is the only correct standard for a certified water damage restoration contractor. I do not know why an insurance company would even allow a non trained or certified contractor to perform work. An IICRC certified firm will be trained in this alleged revolutionary way of extracting water from a water mitigation situation, and have the proper certified equipment. Code Blue did not invent the IICRC way of training.
Code Blue only has in network contractors so they can make money off padding the bill, not provide an exceptional service to the insurance company or policy holder.
An adjuster could easily manage an IICRC firm performing the work. The insurance company would only need to make sure they have a certified IICRC contractor that will do the normal (non revolutionary techniques) such as taking pictures of the loss, taking standard moisture readings daily, using proper equipment, and charging industry standard prices generated from Xactimate Invoicing software.
Xactimate is a software company most every contractor has for billing for work they perform. Body Shops use it to establish the industry standard price for labor, part, paint, etc. Contractors use it for industry standards for pricing building homes, etc.
I am not sure why an insurance company or contractor falls prey to Code Blue. The only conclusion I can come to is that these above referenced individuals are tricked by the smooth talking representatives, and their false claims of this new technology that actually is old technology. Again, any credible educated contractor probably already utilizes this so called new technology.
If anyone would like to reference the IICRC, go to This site provides a lot of information on the standards for cleaning techniques, and certified professionals by zip code.
Hopefully I have been able to save both insurance companies and contractor's money from reading the above information. Hopefully is anyone reading this information has contact with Code Blue, they will be prepared to ask the proper questions before getting scammed into using this company.
Sheila
Austin, Texas
U.S.A.
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