Can I Use My Own Contractor on an Insurance Claim?

Navigating an insurance claim after property damage can be overwhelming. Policyholders often ask, “Can I use my own contractor?” In most cases, you can select your own contractor, choosing a trusted professional.

Understanding Your Right to Choose

Property insurance policies operate on the principle of indemnity: restoring the policyholder to their financial position before the loss, without profit. This supports a policyholder’s right to choose who performs repairs. The insurer covers restoration costs, not dictating the service provider.

Policyholders maintain the right to select their own contractor. Insurers may offer “preferred vendors” or recommended contractors, but these are suggestions, not mandatory. Insurers cannot compel or penalize a policyholder for choosing an independent contractor.

Policyholders should review their specific policy language. While the right to choose is recognized, some policies may contain “Preferred Contractor Endorsements” or “Right to Repair” clauses granting the insurer more control. Even with these, insurers cannot force a policyholder to use an unlicensed, uninsured, or untimely contractor.

Navigating the Claim with Your Chosen Contractor

After property damage and initiating a claim, promptly inform your insurer of your decision to use your chosen contractor. Clear communication sets expectations. Document this notification, via email or certified mail.

Next, obtain a detailed, itemized estimate from your contractor. This should outline all necessary repairs, materials, and labor costs to restore the property. Include specifics like scope of work, unit costs, and any required permits or fees. Photographs or videos of the damage before repairs can also document the estimate.

The contractor’s estimate goes to the insurance adjuster for review. Discrepancies between the contractor’s proposed scope and the adjuster’s assessment are common, as adjusters may use different software or averages. The contractor can discuss repair scope and cost directly with the insurer, facilitating negotiations for an agreed-upon plan. Maintain open communication among all parties for a smooth resolution.

Facilitating Repairs and Receiving Payment

Once the scope of work and cost are established, your chosen contractor can begin repairs. Oversee the work to ensure it aligns with the approved plan and meets quality standards. Keep records of all communications and progress.

During repairs, additional damage or unforeseen costs may be discovered. A supplemental claim can be filed to cover these expenses. The contractor or policyholder must furnish updated estimates, invoices, and evidence of new damage to the insurer for approval. Detailed documentation and clear communication with the adjuster are key.

Insurers issue payments in several ways. Sometimes, a check goes directly to the policyholder. Other times, a two-party check names both the policyholder and contractor. With a “direction to pay” form, the insurer might pay the contractor directly. If a mortgage is involved, the lender may be included on checks or require funds in an escrow account to ensure repairs are completed.

Many policies operate on a Replacement Cost Value (RCV) basis. The insurer initially pays the Actual Cash Value (ACV) of the damaged property, accounting for depreciation. The remaining amount, known as recoverable depreciation or a “holdback,” is released once proof of repair or replacement is provided. Policyholders are responsible for their deductible, the amount paid out-of-pocket before coverage begins. This deductible is subtracted from the total claim amount paid by the insurer.