How to Use General Contractors for Insurance Claims

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When your home suffers damage from a storm or vandalism, your homeowner's insurance company may pay for all or a portion of the necessary repairs. The insurance agency may send a damage adjuster to your home to examine the damage and estimate the cost of the repairs. By using general contractors in your area, you may be able to negotiate a higher settlement from the insurance company.

Things You'll Need

  • Minimum of two repair estimates
  • Solicit two or more repair estimates from reputable local contractors, calling on contractors recommended by friends or relatives. Meet with the contractor when he examines the damage but do not sign a contract to start work until your insurance agency approves.

  • Hold onto the estimates until your insurance agency gives you their estimate for the cost of the repairs. If their figure is higher than the amount estimated by the contractors, accept their offer.

  • Call your insurance agent if the agency's offer is lower than the contractor's offer and inform them of the discrepancy. The agent will give you an address where you will mail a copy the contractors' estimates for review. Keep the originals.

  • Provide the contractors' contact information to the agency. If there is a substantial difference in estimates to repair the damage, the insurance representative may contact one or both of the contractors to find out why they think the repairs would be higher.

  • Discuss the possibility that the cost of the repairs might go higher if the contractor discovers additional damage once he begins the project. Agencies handle this situation differently, but you may also be able to file an appeal for more money if the cost of materials increases unexpectedly.

  • Pay your deductible directly to the contractor, and your insurance agent will send you a settlement check for the balance of the cost. Some contractors may waive a portion of your deductible to get the job.

Tips & Warnings

  • If you think your insurance company is unreasonable in negotiating your settlement, contact your state's Department of Insurance to file a complaint.
  • Your homeowner's policy may not cover the actual cost of the repairs. Some policies consider the value of the home when figuring the settlement claim, while others insure your home at full replacement cost. Read your policy carefully to determine what type of coverage you have.

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