Why Restoration Services Cost More in 2025: Labor, Insurance & Industry Pressures Explained

What's Driving Up the Cost of Restoration?

If you've recently had water or fire damage to your home or business, you may have noticed that restoration quotes are higher than they were just a few years ago. You're not imagining things—the cost of professional disaster restoration has increased across the industry. But the reasons are complex, and most are out of a contractor's control.

As IICRC Master Fire & Water Restorers with over 40 years of service in Chicagoland, our team at ServiceMaster Restoration By Simons has a front-row seat to the evolving pressures that drive up costs. From inflation in labor and fuel to changes in the insurance claims process, we want to explain what's happening—and how it affects both consumers and restoration professionals.

1. Skilled Labor Costs Are Climbing

Restoration work isn’t general contracting. It requires training, certification, and health/safety knowledge. Technicians must be IICRC-certified to safely handle hazardous materials, moisture control, mold prevention, and post-fire toxins.

Key Stat:

According to the Bureau of Labor Statistics, wages in the construction and extraction industries increased by 5.8% from 2021 to 2022, with hourly wages now averaging $26.21.

Why it matters:

• The restoration industry faces a skilled labor shortage.
• Workers with proper certifications are in high demand.
• Restoration firms must increase pay to recruit and retain top talent.

2. Transportation & Fuel Costs Impact Every Job

Restoration is a mobile business. Crews often haul equipment like negative air machines, air scrubbers, and drying systems to multiple sites per day.

Key Stat:

In 2022, the national average diesel price spiked to $5.81 per gallon, per the U.S. Energy Information Administration (EIA). Prices have stabilized but remain high.

• These costs hit restoration companies directly.
• Higher delivery and equipment mobilization costs get passed to consumers.

3. Material Prices and Supply Chains Remain Volatile

Post-pandemic supply chains haven’t fully recovered. Core materials like drywall, lumber, HEPA filters, and antimicrobial treatments are more expensive and harder to source.

Example:

• Lumber prices reached $1,670 per thousand board feet in 2021 (NAHB).
• Dehumidifiers and air scrubbers remain on backorder.

Result: Restoration companies must quote based on current, sometimes inflated, material costs—not historical averages.

4. Insurance Industry Changes Are Slowing Claims

This may be the most painful issue of all.

What's happening:

• Catastrophic weather events are more frequent, driving record-high claim volumes.
• The average property insurance claim now takes 30-45 days to resolve.
• Major insurers have reduced adjuster staff by 15% or more.

Why that matters:

• Restoration companies are often unpaid for weeks or months.
• Many must carry the cost of labor, equipment, and materials without timely reimbursement.
• As a result, restoration providers are tightening payment policies and requiring larger deposits or upfront payment.

Stat:

According to the Insurance Information Institute, natural disasters caused $125 billion in insured losses in 2022 alone.

5. Insurance Denials Are Increasing

As the insurance industry grapples with higher claim volumes and payouts, many companies are adjusting their risk tolerance. This means:

• More residential and commercial claims are denied due to technicalities or coverage exclusions (especially mold, seepage, or gradual damage).
• Policyholders are often caught off guard, leaving restoration companies to explain what’s covered—and what’s not.

Result: Some customers are forced to pay out-of-pocket, and many restoration firms now incorporate legal or claim support costs into pricing.

6. Restoration Companies Face Rising Insurance & Regulatory Costs

It’s not just property owners feeling the insurance crunch—restoration businesses are, too.

• General liability and workers' comp premiums have gone up.
• OSHA and EPA compliance requirements continue to evolve, requiring ongoing investment in training and equipment.

These behind-the-scenes costs directly affect pricing for fire damage, water mitigation, mold remediation, and content cleaning services.

What This Means for You as a Homeowner or Property Manager

The industry isn't price-gouging. Restoration companies are adjusting to:

• Delayed or denied claim payments
• Higher operating costs across labor, materials, and fuel
• Increased regulatory burden

Getting your property restored after a disaster is still one of the best investments you can make. Delaying service often results in higher repair costs, health hazards, or total loss.

Pro tip: Review your insurance policy today. Ensure coverage is sufficient, understand your exclusions, and consider consulting your agent annually.

Frequently Asked Questions (FAQ)

Q1: Why is my water damage cleanup quote higher than in 2020?
A: Due to inflation, labor shortages, supply chain issues, and increased insurance claim delays, restoration companies face higher costs across the board—which are reflected in modern quotes.

Q2: Can I wait to start restoration until my insurance pays?
A: Delaying restoration can worsen damage, increase mold growth, and reduce insurance coverage eligibility. Most professionals recommend starting mitigation immediately and coordinating with insurance in parallel.

Q3: Why is my insurance company taking so long to approve my claim?
A: Many insurers are short-staffed and overwhelmed with high claim volumes, especially after major storms. Some claims are now taking 30-60 days to process.

Q4: What if my insurance claim is denied?
A: Restoration firms may offer payment plans or refer legal professionals, but you may need to pay out-of-pocket. Having detailed documentation and pre-loss photos can help support your case.

Q5: What credentials should a restoration company have?
A: Look for firms certified by the IICRC (Institute of Inspection Cleaning and Restoration Certification). Also confirm local licensing, insurance, and experience handling insurance claims.

About the Author

Sam Simon is the COO and Co-Owner of ServiceMaster Restoration By Simons, a multi-award-winning disaster restoration firm serving Chicago, the North Shore, and suburban Lake and DuPage Counties. Sam is an IICRC Master Fire & Water Restorer, the industry’s highest designation, and co-author of RESTORE: A Complete Guide to Protecting Your Home As Your Most Valuable Asset. With over 40 years of restoration experience and a background in videography, Sam brings transparency and insight to every job.

Need Help Navigating Restoration or Insurance?

ServiceMaster Restoration By Simons offers certified services for:

• Water Damage Restoration
• Fire Damage Restoration
• Mold Remediation
• Specialty Cleaning

We proudly serve Chicago neighborhoods like Lincoln Park, Gold Coast, West Loop, and Albany Park, as well as North Shore suburbs including Evanston, Wilmette, Winnetka, and Lake Forest.

Trust the Nation's Oldest Restoration Brand
ServiceMaster was founded in Chicago in 1929. Our franchise proudly continues that legacy today as an MBE/WBE-certified, IICRC-accredited, 2025 Inc. 5000 Honoree and recipient of the BBB Torch Award.

Don't know what to do next? We do.