I’m sharing this to help you choose a contractor.
Many homeowners think that property damage claims are handled similarly to auto claims, but they aren’t. The truth is you have the right to choose any contractor that you like and that you trust.
Price should not be a factor when it comes to an insurance claim.
Here are a few myths vs. facts to “set the record straight” regarding the insurance process.
Myth: Your insurance company needs estimates.
Fact: Regardless of the contractor you choose to work with, the insurance company will write their own estimate based on their property assessment.
The estimate will be prepared using a third-party estimating program. These “prices” are updated monthly by zip code and set by a third party.
There is zero “price” negotiation.
The only negotiation is regarding the actual assessment of damaged building materials based on quantity, type of installation, and building code requirements.
Myth: Your insurance company will tell you which contractor to choose.
Fact: By law, you are allowed to select the contractor that you like.
The insurance company will pay the exact amount on their assessment, no matter who you choose to do the work.
Myth: You should get estimates and select the cheapest contractor to save money.
Fact: Believe it or not, there is more than one way to write an estimate on a roof.
Pricing depends on material choices, type of installation, and whether certain materials on the roof will be reused or replaced with new ones.
The “cheapest” contractor will likely not complete all the work on the insurance estimate or reuse certain building materials.
You run the risk of getting an inferior installation that will cost you more over the roof’s lifespan.
Price should not be a deciding factor for your project, as the insurance company has fixed the pricing structure based on their third-party estimating program.
Be sure to select a contractor who will do all the work listed by the insurance assessment.
Myth: If you get the work done cheaper than the insurance estimate, you can keep the rest.
Fact: The insurance company will pay a portion of the claim upfront.
This is called the “Actual Cash Value” (ACV) payment.
The remaining claim balance (called “depreciation”) will be paid only once the work is complete and the insurance company has been invoiced, proving that all the work was done as per the insurance estimate.
The only legal way to obtain the “depreciation” is to provide evidence to the insurance company that the work was completed.
Typically, the insurance company will require an invoice with a dollar amount.
If you select a contractor who has done the work for less than the insurance amount, one of two things can happen.
- The insurance company only releases “depreciation” up to the actual invoice amount. This means that you are not able to keep the “leftover” money as it will not be sent.
- If the contractor falsifies the invoice amount to the insurance company, both you and the contractor are participating in fraud.
Tips to Choose a Contractor
Be sure to select a contractor that meets the following criteria:
- Understands insurance policy language
- Properly assesses your property damage
- Understands insurance industry estimating programs
- Will review and complete all work as agreed upon on the insurance assessment
- Will invoice the insurance company directly once all work is complete
We are committed to providing you with EXCELLENT service and PEACE OF MIND during this process.