I work in the construction industry and would like to perform my own repairs. What is my home insurace company required to pay for labor and materials related to a claim?

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Asked June 9, 2014

1 Answer

When an insurance company settles a claim for damages to your home, they usually write a check based on the statements of an appraiser as well as written estimates. Technically, you have the choice of doing the work yourself or hiring a contractor, but there are complications that need to be considered. The actual amount you will be paid is determined by the adjuster who examines the damages, regardless of who performs the repairs.

If you have a mortgage on the home, the insurance company may not write a check directly to you. Instead, the check will be made out both to you and to the lender or mortgage company. Since the lender has an insurable interest in the home, they also have a say in whom and how the repairs can be made.

If you are a licensed contractor, your lender may agree to you performing the work yourself, after you present them with proof of licensing and insurance. If you cannot provide them with that information, they are not likely to agree to you making the repairs. For the lender, the primary goal is to return the property to its original condition, and allowing an unlicensed contractor to perform the work may not do so, or could even result in additional damages to the home.

If you own the home outright, you will have the option of having the work done by someone else or doing it yourself. If the repairs are not done, or the repairs do not restore the home to its previous condition, you could have problems in the future. For example, if a tree falls on the roof later and you have to file another claim, evidence that earlier repairs were not made will, at the very least, reduce the claim amount. At worst, your policy could be canceled because you did not perform repairs that you were paid to do.

Answered June 9, 2014 by Anonymous

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