I have had the pleasure of being active in the disaster restoration industry since the late 1980’s. Among other things, this means that I am getting old. In 2006 I was asked to speak on my thoughts regarding future developments in the restoration industry. Since that time, I have become a student of change for restorers. I started to write an annual newsletter and then subsequent articles on the subject about ten years ago. I have had the great opportunity to be involved in the industry from an outsider perspective. I got to study restorers from across North America, the insurance and claims world, the macro-economic climate, as well as product and service providers. I used these influences to weave together the items that I expected to be the most relevant to restorers in the next twelve months.
Per my usual practice, I grade my previous years predictions to establish credibility for my thoughts on the upcoming year. As I look back at the year, I think that I was remarkably correct on my thoughts for 2025, but I will let you be the ultimate judge of that. I believe trends were right on, with the qualifier that perhaps the listing of each may have been out of order based on the overall impact.
2025 Trend Review
Trend #1 – Technology
My prediction: AI is a buzzword that gets overused. It is a very important element of the technological 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 by layering this 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 directly 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 an analysis of equipment usage, to maximize 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, to underwriting, to adjusters, to insurance companies, to the contractor. This will provide 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.
The only area that may have been a little weak on this subject was my prediction of how quickly individual companies could layer AI into their operation for real change. The best of the best used AI to radically change their business to improve labor and capital efficiency. That being said, the average restorer has experienced a more passive relationship with AI. You will have to keep an eye out for this issue in my upcoming 2026 Trends article.
From a basic technological standpoint, this past year was a tipping point where technology was an essential difference maker for many operators. From the use and embracement of KnowHow to identify and communicate company knowledge, to Magicplan and Docusketch that automatically integrated field images into an ESX and then a preliminary, or even final estimate. I mentioned that even if a company is not using AI, then the software packages they are using, are fully exploring and integrating AI into their platform. There has been a real drive this year to create strong integrations and to allow for open API’s that provide for custom integrations. This process will continue to expand, although the software options and needs will also expand. Programs like AskAiME, Actionable Profile from Actionable Insights are making the estimating platform more efficient and accurate.
As per my advice in past years, follow my three rules for your technological adoption:
- Technology needs to remove steps from the process.
- Technology needs to reduce cycle-time.
- Technology needs to help scale your business, without having to scale the number of employees or overhead in your existing operation.
The technology evolution in the past year has created a pathway for astute restorers to leverage their resources for profitability and growth.
Trend #2 – A Changing Insurance Market
My prediction: The insurance industry is struggling with some dynamics that are impacting their business model, and this is filtering down to the insured 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 this 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 that would insure his home for about $10,000. This was nearly a 300% increase in premiums. It also increased his deductible from 1% of policy to 3%. Let’s assume that this was a $500,000 home. The deductible was 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 as well, such as Florida, California, Colorado, and other areas 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. I predict this uncertainty will lead to fear by those insured to turn in claims, deductibles and premiums continuing to rise, and increases in alternative coverage plans. Below are some expectations for changes to the insurance market.
I think in many ways, this may have been the most impactful trend last year. The overall claim volume was down 10-30% – depending on the season and marketplace. This was likely due to a lower volume of catastrophic events and market-based realities, but any conclusion must include the changes to the insurance market. This was also amplified by economic uncertainty.
From the article last year, “Everyday claims volume will diminish due to fear of higher premiums, higher deductibles and general uncertainty.” Many restorers have been adjusting their strategies to meet this new market reality.
My action items that discussed accountability, budgeting, and adjustments to your marketing strategy, were all appropriate to address the challenges that were encountered by many companies.
If you followed my recommendations, then you weathered the challenges better than many.
Prediction Trend #3 – Economic Turbulence
My prediction: I really am struggling with this major challenge but keep coming back to the reality that our economy is struggling and that it 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 and that won’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 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 for the economy and the impacts of technology, and reallocating investments, but this will take time and 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.
My additional thoughts and recommendations based on this trend included continued inflation, high interest rates, restrictions on credit availability and a continued hard insurance market. While this trend focused on the macroeconomic environment, the reality is, these are the issues that affect “main street” businesses. Many of the restoration companies that I have spent time with this year were experiencing challenges caused by this trend. I was hopeful that some of these issues would have been resolved by the end of 2025. But the reality is, inflation, debt, unemployment, government spending, investing and economic cycles, are very difficult to change.
The need for great leadership in turbulent times is essential. Common business practices, such as budgeting and strategic planning, are more important that ever.
Comment and Review on General Trends
The following were listed as emerging trends rather than predictions. For that reason, I will not rate these items and just comment on the relevance of the thoughts.
Emerging Trends and potential areas of influence in your business:
Mergers and acquisitions:
- I thought that we would see a continued push with more activity than in the past, but it would not be a major impact. I was right on with this thought, although I did expect several of the existing strategic operators to roll their equity this year. There was a bit of movement here with the sale of American, but many of the others were unable to achieve their targets due to the trends listed above. There are at least three new active equity companies in the restoration industry now that will continue driving the M&A trend for the foreseeable future.
Environmental influence on insurance and
corporations:
- It is good that this was not an official recommendation, because this issue has been removed from the conversation – at least for the near future. It appears that some of the major influences for this trend have turned their focus to power generation, to meet the AI need. It will be interesting to see where this issue settles out as extreme weather events continue to impact communities and insurance companies, while the hunger for more power and more data centers lies at the other side of this issue. This issue also becomes less important to individuals if they are struggling to put food on the table.
Currently there is still a skilled labor crisis in construction. Immigration and a new emphasis on the trades may create some reprieve in this area in the coming years. The backlog and deficit are still relevant and substantial though.
- This is another area where I am happy that I did not make this a prediction. The current immigration crackdown is likely further diminishing skilled labor availability. This may be the reason why according to the 2025 State of the Industry Report, companies are shying away from re-construction.
I am not sure how it will manifest but during this election year, political instability will have an impact. This may be like the riots from several years ago, but really this is an unknown. The current climate is not setting up well and could get very complicated. I recommend meeting with your regional government or downtown businesses, to prepare catastrophe board-up and response plans. At a minimum, this will allow you to maintain and improve your marketing contacts.
- I live in an area that appears to be in a constant state of protest, maybe that is why this was top of mind last year. No widespread riots but lots of protests.
In summary, I am confident that my predictions last year were relevant drivers of change in most companies and the industry in general. Restoration companies need to proactively adapt their business and operational strategies to succeed in this changing world. Companies should focus on strategic planning, financial planning, leadership development and organizational accountability to ensure their success. You can find my 2026 restoration trends article here!
Phillip Rosebrook Jr., CR
Phillip Rosebrook Jr., CR, is the president and managing partner in Business Mentors, and founding partner of RestorationTrainingOnline.com. He specializes in organizational change, building corporate infrastructure, defining marketing strategy, developing measurements for accountability and creating sustainable business plans. He is a frequent author for C&R, having earned the Golden Quill Award for an article on direction and vision. Phil is a RIA Certified Restorer (#179) and has held numerous IICRC Certifications. He has been active in the restoration industry for over 30 years and served as an industry advisor and consultant for over 20 years.
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