Top 2025 Trends and Actionable Insights for the Restoration Industry: Technology, Insurance, and Economic Strategies

(This article originally appears on C&R Magazine.)

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I started working in the restoration industry on spring break of my senior year of high school back in 1988 and have spent my entire professional career in disaster restoration.  I worked in a restoration company for 10 years and have spent the last 26 years as an advisor to the industry.  From this advisory position, I get to study the industry and have a macro view of trends that will impact restoration businesses.  Over the past decade, I have taken the bold step of predicting the top trends to be aware of as you define your strategy for the upcoming year.  In this article, I will not only address the key challenges that will be relevant to your business, but will also discuss the steps you can take to address these issues and place your business in a position to thrive. 

Like last year, my top trend will be the impact of technology on the industry.  This is the first year in quite a few where the labor market will not be featured. Maybe the reason for overlooking labor is that this has become normal business and not a trend.  Some labor markets are loosening, and others are just as difficult as ever.  If you want my thoughts on labor and addressing these challenges, then you can search my previous trends articles in C&R Magazine.  Not only is technology taking over most areas in restoration, but it is also becoming a tool to improve your business.  The challenge will be to balance the need for new technology solutions with a personal touch and business emphasis.  I find it remarkable that the more technology solutions we utilize, the less we communicate.  Companies that learn to balance technology with the needs of our employees and the expectations of our clients will take a leadership position in their respective markets. 

Trend #1 – Technology  

AI is a buzzword that gets overused. It is a very important element of the technology revolution, but not the only area of impact.  Field-entered data, smart devices, GPS, API, Bluetooth, integrations, Digital Twins, lidar and spatial imaging, image recognition, virtual assists, data analytics, and real-time language translation are all solutions that are driving and contributing to this change.  Each of these solutions is a powerful resource, but the real opportunity lies within the synergies offered through layering technology.  For example, you can expect to see the field solutions, such as meters and equipment by Tramex, Phoenix, and DryEaze, start to build and support the billing process.  This equipment will then be used to support program reporting requirements, direct from the field.  Kahi can track and document asset and geofenced locations for vehicles and equipment to support and document billing processes as well as analyze equipment usage to maximize the performance of your assets.  Encircle and Clean Claims are helping amalgamate and integrate various solutions into a claims hub that integrates and drives information from various levels of the job. CoreLogic is the only program that provides a seamless integrated platform up and down the entire property lifecycle from real estate, underwriting, adjusters, and insurance companies to the contractor.  This will provide very many powerful resources as technology continues to evolve.  Companies like Albiware, Xcelerate, and Capabuild are building off a mobile-first platform that will remove steps from the claims, documentation, and communications process. 

Over the past several years, there have been substantial investments from outside groups into the restoration technology space. I do not think this is a complete list, but Albiware, Kahi, Xcelerate, HOMEE, Docusketch, HostaAI, Helix, and more have all received substantial capital investments.  This will lead to more comprehensive and bleeding edge developments that will add value to the end user and enhance their utility. 

As I look down the road at technology, I see developments that will substantially change how estimates are written, jobs are documented, and bring shifts in administrative, billing, and much more.  In five years, it is likely that restoration businesses may be structured completely differently than today.  As discussed earlier, this article is not about years down the road but rather the immediate future.  The reality is that companies need to take steps today that will build the foundation for a changing environment and ease this process by creating a nimble operation that can adapt to a changing environment and is not burdened by a large overhead or a cumbersome structure. Invest in the staff and systems that will allow you to learn about emerging technology and assess the best solutions for your business both today and tomorrow.  Many owners do not have the capacity or background to fully assess this rapidly developing area of the industry – it is coming so fast that it is overwhelming. Add people of virtual resources to your team to help analyze and deploy the most relevant solutions for your business.

Artificial Intelligence: I mentioned above that AI is important, but not the only area in technology that needs your attention.  It is now a common saying that AI will not take your job, but people who know how to use AI will.  The good news is that many of the technology providers in the industry are incorporating AI into their solutions, so when you use their products, you are accessing AI.  

• Watch for solutions that help effectively plan and manage your projects from drying to construction.  These solutions will take the job site and scope details to proactively and effectively manage your project. This process will help pre-approve the scope, estimate, and billings so that the agreed price and scope are authorized and streamlining the project payment and completion process. Actionable Profile from Actionable Insights has been a leader in this area for years. At the end of the year, expect to see this process get real traction in proactively managing mitigation jobs.

Integrations: The idea of integrated software has been a source of frustration for most contractors.  As the industry evolves, our clients are all asking us to use many different programs to provide similar data – just in a different format.  While this problem will not go away, there are many more integrations and a desire for even more.  There is even a movement to define common languages and data to be shared, which will further drive integrations.  Integrating software and hardware is a very complicated process that takes time and lots of money.  The newer companies have an advantage because they are built on new and more flexible platforms, while the legacy programs (which also have more users) have a larger challenge in building integrations.  As identified in last year’s prediction, progress is being made and continues.  

Digital Imaging and Recognition: I have heard predictions that most estimates will soon be written by AI. This is happening today and coming from 3D images and digital photographs. Docusketch, Matterport, and Magicplan are creating floor plans that are used for documentation, dimensioning, sketches, and direct integration into Xactimate and Symbility.  HostaAI and new players like Rebuild will use photographs and image recognition to take this to the next level and automatically write the estimates.  The role of estimating will transition from creating estimates to reviewing and approval. Documentation, risk management, and billing support will become essential features when you use imaging technology. 

Trend #1 – Action Items

1. Create a strategic plan for technology. 
   One problem many companies have is that they keep adopting new technology solutions without a plan.  The result is having 20 different programs and subscriptions and not really using any of them well.  Proper use of technology starts with an assessment of the problems that are being encountered and then creating a strategic software plan to meet these needs. 
   
2. Understand costs and look at ROI.
   Since technology is taking more time and resources, it is essential that you take a frequent look at the costs and benefits of your technology deployment.  Review your programs, usage, needs, value, and financial return from your technology spend to assure that you are getting a proper return. In your analysis, realize that your sunk costs are not recoverable, and this is not a reason to maintain ineffective and inefficient programs.
   
3. Identify technology that removes steps from the process, speeds cycle times, and allows scalability. Ideally this can be implemented without having to keep adding new people or assets. 
   
4. Play with Generative AI programs. 
   Learn enough to get started, and then keep programs open on your computer and explore how they can be utilized. See if you can find new ways to improve common tasks using these resources. 
   
5. Network with your peers.
   Use resources such as the Restoration Industry Association (RIA) to learn how others are leveraging technology in their business.  RIA has a technology task force that is creating great information that you can leverage in your business.  
   
6. If your size allows, then consider hiring a full time or even fractional Chief Information Officer.
   You can also look for a virtual or subcontracted CIO or even assemble a task force to create software objectives and then allocate resources and routinely assess the ROI and use of each solution.
   
7. Scale with virtual assistance or staff on demand.
   These can help you scale your company without needing to bring full-time employees on board. Karma Staff and others have created programs that you can use to hire skilled restoration staff who are working virtually. Play around with Upwork and find out how you can improve capabilities and capacity without needing to add substantially to your overhead. 

Trend #2 – Changing Insurance Market

The insurance industry is struggling with some dynamics that are impacting their business model, and this is filtering down to their insureds and the restoration industry.  I was visiting with a client in Texas who had just received his insurance renewal. His premium was increasing from $3,500 to $20,000!  He realized that was a way for his provider to tell him that they didn’t want his business any longer, so he shopped the policy and found a new company to insure his home for about $10,000.  This was nearly a 300% increase in premiums and increased his deductible from 1% of policy to 3%.  Let’s assume that this was a $500,000 home. The deductible is now $15,000.  If you are a restoration contractor with an average job size of $12,000, what happens to your business if your average job is below the deductible amount?  Insurance companies are struggling with profitability challenges in other states, such as Florida, California, Colorado, and other states impacted by weather events.  Inflation is amplifying this reality as many building materials and trades are still experiencing price increases.  An insurance company sells a policy today to repair a property sometime in the future. Uncertain pricing adds pressure to this transaction.  Additionally, the fear of billion-dollar extreme weather events causes insurance companies to consider different approaches. Below are some expectations for changes to the insurance market:

• Expect to see more smart home devices that limit the frequency and magnitude of damage due to frequent occurrences.
• Last year was the “hardest” insurance market in over 40 years.  This is exemplified by higher premiums, increasing deductibles, stronger underwriting, and fewer new companies in the market.
• Everyday claims volume will diminish due to fear of higher premiums, higher deductibles, and general uncertainty.
• Watch out for co-insurance risk and underinsured properties.
• Alternative solutions such as captive insurance, aggregate deductibles, layered coverage, parametric coverage (trigger event peril), transferal of property risk to the tenant, and even multiple company coverages may be encountered in commercial losses.risk and underinsured properties.

Trend #2 – Action Items

1. Improve sales skills.
   With the rise of deductibles and self-insured properties, as well as an increase in cash-out settlements, your first responders and estimating staff will need to improve their sales skills.  You may have to start acting like California restoration companies and provide upfront pricing for all projects, including mitigation and other typical T&M jobs.  You may also explore financing opportunities for traditionally covered losses.  This may be home equity or just credit card payments. 
   
2. Strategically define marketing activities and proactively manage referral sources. 
   You may decide to pursue municipalities, commercial, healthcare, or other verticals that have more defined coverages or better access to capital.  
   
3. Manage budgets and streamline job production. 
   The above situations may result in lower payments for claims, so emphasis should be put on managing profitability and cash from all projects.
   
4. Understand that insurance companies are struggling with catastrophic situations. 
   Look into programs like HOMEE or even managed repair programs that are distributing losses during catastrophic events. This represents one of the few times when the demand for restoration work exceeds the supply of contractors.  
   
5. Understand the value of your data. 
   Use the technology solutions listed above to deliver quantifiable operating data for your business.  Use tools such as Power BI from JOC Analytics, CoreLogic, Albi, PSA, and predictive modeling from EarthVisionz or CoreLogic.  This data will help you form quantifiable and performance-based conclusions and future strategies. 
   
6. Manage overhead and run a nimble operation. 
   Both technology and insurance changes have the potential to fundamentally transform your business.  Do not get locked into restrictive overhead challenges.  The companies that plan and adjust will win, while slow and reactive companies will struggle in this environment. 

Trend #3 – Economic Turbulence

I really am struggling with this major challenge, but I keep coming back to the reality that our economy is struggling and will require pain and time to work out.  The massive amount of debt and spending will be difficult to unwind – even if you assume that the change in government can be successful, the government is responsible for over 30% of the GDP.  This means that even cuts in government spending will have short-term impacts while capital is redistributed.  The second largest government expense is interest on debt, which doesn’t go away until the debt is retired.  These impacts create headwinds for the private sector.  The commercial real estate market is struggling with high debt levels and low occupancy.  Much of this debt is coming due soon and could impact the viability of these companies. Personal debt for credit cards, automobile loans, and education stands at record levels and creates uncertainty. Some major banks have serious liquidity problems due to over-investment in long term government bonds that may require massive bailouts. All these issues create uncertainty and impact both your business and your staff. I am hopeful that the current steps being taken will address many of these issues, but it will not be easy, and it will cause challenges along the way. I am optimistic about the economy, the impacts of technology, and reallocating investments, but this will take time and will likely be more difficult than many would imagine. Even if new strategies are successful, I suspect that we will encounter at least a mild recession, and other fiscal challenges will ensue for the timeline of this article.  Here are some of the potential challenges that these issues can create:

• Inflation will persist as some of the core causes are fuel, labor, regulation, and infrastructure.  It sounds as though tariffs may play a role in the short term as international relations are adjusted.  I expect inflation to be present for a while which impacts the cost of our labor and other business expenses. 
• As long as inflation is present and the US debt is at such extremes, the 10-year bond market will not decrease much – even if short-term rates are lowered.  The 10-year rate drives many of the consumer and business rates. 
• The current difficult insurance market will continue. 
• I expect the issues above may lead to higher unemployment, which may increase the supply of great workers.  Construction staff will still be hard to find due to large municipal, infrastructure, and other major projects.  
• The incoming government will be very different than anything we have seen.  This has the potential to be a game changer for any economic challenges, but changing a bureaucracy of 5 trillion dollars will take time.  

Trend #3 – Action Items 

1. In uncertain times, it is more essential than ever to have a solid strategic business plan.  Uncertainty and inefficiency can be very costly to your business.  Strong leadership will be rewarded in a challenging environment.  
   
2. Manage margins on jobs and protect your profitability.  Cash will be an important need during uncertain times.  Create a strong cash management and collections policy and have accountability tied to collection activity.  Define A/R responsibilities across the board and make sure that your team is all a part of driving cash in your business.  Take a look at resources such as sureti to speed cash. 
   
3. Create operational budgets and be strategic.  Have short and long-term plans that allow you to manage your progress in real-time and adjust where necessary. 
   
4. If the changes in the structure of our government by the new administration are successful, then you can expect these economic challenges to change by this time next year, but I predict that it may be a messy process and take some time. 

Here are some additional trends to keep an eye on:

• M&A activity is still relevant and active.  There are many new entering companies in the market, and I get frequent calls from investment funds exploring restoration.  These new entrants are coming at a time when many of the existing companies are looking to exit their portfolios as well. 
  
• ESG will become a bigger factor in the insurance industry as large catastrophic events continue to impact their businesses.  I expect companies like EcoClaim to benefit from these requirements. Even if your business does not have an environmental emphasis, you may be able to help corporations, government entities, and insurance companies meet their stated emissions goals through the work that we are already doing.  I recommend keeping an eye on this area and checking to see if your business can gain a competitive edge by being a first mover in this area. 

It is not my intent to cause fear in your business.  My purpose is to discuss relevant issues and challenges so you can set your business up for massive success.  Restoration is an essential industry.  We provide work of great value with a strong purpose – restoring the lives and livelihoods of people and businesses impacted by disaster.  We don’t hope for damage to happen, but we hope to be there to lend a hand when it does. 

Do something radically different and focus on delighting your customers, partnering with your vendors and treating your employees with kindness and respect.  Use technology and planning to define your business strategy and then become different by your service delivery and a passionate desire to dramatically exceed expectations across the board.  Be exceptional in the skills of the work you do, so quality becomes a built-in feature of the work you deliver. Keep these principles in mind, and you can build something extraordinary and lasting.

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