Should You Show The Contractor The Insurance Estimate?

If you have an insurance estimate and require roof repair, the most important thing to do is keep an eye out for fly-by-night storm chasing contractors. These are storm-chasing contractors that drive into town for a few hours of labor and then leave. This is not the type of contractor you should hire for roof repairs.

Find a reliable local roofer who can meticulously handle your insurance claim and get you what you need. They will take the time to ensure that your roof is restored and that your insurance company pays them the correct amount. A storm chaser will rush through the repairs and often use the insurance estimate, which means you’ll either have to pay out of cash or they’ll cut corners to stay inside the budget.

The basic answer to whether or not you should show your estimate to a roofing contractor is yes. You can get a check from the insurance adjuster, cash it, and use it to pay for repairs. However, doing so limits your ability to acquire high-quality roofing repairs and gives little opportunity for negotiation. Find a professional roofer that will represent you, negotiate your insurance claim, get the most money for the best repairs, and make sure you can relax while they work.

Why does my roofer want to see my insurance claim?

If you’re making a homeowner’s insurance claim to repair or replace your roof, your roofer will most likely ask for a copy of the claim before giving you a quote. You may have heard about shady roofing firms or even storm-chasing roofing con artists in the news. As a result, you may be afraid to provide your roofer your insurance claim, but rest assured that this is not a technique for us to defraud you. Rather, it’s a means for us to ensure that we’re giving you the most accurate price. Before offering you a quote, your roofer will ask for a copy of your insurance claim for the following reasons:

  • It’s critical that your roofer reads and comprehends your insurance claim and policy. Your roofer must be aware of what is and isn’t covered by your homeowner’s insurance policy. The amount of time you have to complete your project may be limited by some restrictions. Code upgrades, for example, are not covered by other plans. Some policies even classify certain roofing materials as “cosmetic.” There are even insurance that only pay for a percentage of the repairs (ACV—Actual Cash Value– coverage). Your roofer should be able to discuss these issues with you ahead of time and, if necessary, include them in the final pricing. By reviewing the claim, your roofer might avoid unpleasant cost shocks later on in the project.
  • Your roofer is not interested in defrauding the insurance company. RCV (replacement cost value) insurance is common among homeowners. Your insurance company pays for repairs minus your deductible if you have an RCV policy. Some ill-advised homeowners will try to shop around for roofing contractors to avoid paying their deductibles in the hopes of getting the charges refunded or erased. This is insurance fraud, and both the roofer and the homeowner may be held liable. Allowing your roofer to check your insurance claim allows them to ensure that they bill your insurance provider for the correct amount and prevent any fraud charges.
  • Insurance companies prefer a line-itemized invoice that corresponds to their claim. This truth sticks out like a sore thumb after years of working with insurance companies. If a homeowner or roofing contractor presents an invoice that does not line by line match the claim, the insurance company will want proof of why the amount is different. This frequently results in weeks, if not months, of repeated calls and substantial delays in the homeowner receiving the full claim amount.
  • We want to make certain that your claim covers the necessary work. Adjustors frequently use a common template for their claim worksheets—if it’s a roof, it has x,y, and z. Roofs aren’t all created equal. Items on one roof may not be available on another, and vice versa. The criteria of the codes differ from one county to the next and from one state to the next. These items are not acquainted to every adjustor who climbs onto your roof. Most insurance adjustors come in from other states to work during a significant storm recovery period. Furthermore, and maybe most crucially, adjustors do not install roofing. The majority of them have no idea what supplies and labor are needed for the finest installation. As a result, it’s always a good idea to have your roofer look through your claim to ensure that no additional payment is required for items that were overlooked or paid erroneously.
  • Your roofer can assist you in getting your money from insurance by reviewing your claim. Your roofer, like you, wants to be paid. Allowing your roofer access to your insurance claim allows them to submit a final invoice that corresponds to the claim, allowing you to receive your money sooner. It also enables them to assist you in obtaining additional funds from your insurance carrier in the event that you require additional funds to cover lost goods or larger code upgrade items (such as decking replacement). All of this aids you and the roofing provider in receiving payment in a timely manner.

We understand that there are some shady roofing companies and contractors out there. As a result, it’s critical that you hire a roofing contractor you can rely on. The best thing you can do is do your homework on any contractor you intend to hire. This is the most efficient technique to avoid being a victim of a scam. Determine how long your contractor has been in operation. Check the contractor’s web reputation and get referrals from reputable friends and neighbors. The Better Business Bureau is an excellent resource for researching local contractors and businesses. If you do your homework, entrusting your insurance claim to your roofer should be a simple decision.

Do I have to accept the insurance estimate?

If the figure the adjuster gives you does not match the estimates you’ve received, you don’t have to accept it.

Does insurance pay contractor directly?

Some contractors may request that you sign a “direction to pay” form, which authorizes your insurance company to pay the firm directly. Because this is a legal document, read it carefully to ensure that you are not also assigning your entire claim to the contractor. Before you sign, call your insurance agent if you have any doubts. Assigning your whole insurance claim to a third party removes you from the process and places the contractor in charge of your claim.

Before allowing your insurance to make the final payment to the contractor, double-check that the work on your property has been done to your satisfaction.

Can I use my own contractor on an insurance claim?

In most circumstances, the cost of finishing work on your house will be calculated by your homeowner’s insurance carrier. The idea is to compensate you for the exact cost of restoring your home to its pre-loss condition.

Your homeowner’s insurance company will either pay the cost of repairs to the chosen contractor or issue you a cheque for this precise amount after these calculations are completed. You can now employ a contractor to finish the repairs on your house. Alternatively, you may be able to do the repairs yourself or simply leave your home as-is in some situations.

Make sure you understand and follow all of the terms of your insurance policy. There are frequently details that define how repairs should be carried out. If your policy does not include these information, you should talk to your insurance company about how you plan to handle repairs. There are usually requirements that you give receipts for labor and materials for repairs, and that any excess be refunded to the insurance provider. Attempting to deceive your insurance company may result in legal action.

To put it another way, you might be able to “In some cases, you can “benefit” from the insurance claim and repair your own home. That’s it “However, if your state laws and insurance policy allow it, “profit” is essentially a trade-off for doing the work yourself or lowering the value of your home by utilizing less expensive materials.

In fact, if you want to, you might be able to leave your home half-destroyed and use the money to go on a trip.

However, there are a few constraints and things you should be aware of before tampering with your policy in this way.

If You’re Still Making Mortgage Payments, then Your Bank Can Require You to Fix Your Home

To begin with, many people do not really own their homes. If your bank fully or partially owns your home, it has the option to repair it.

You’re not technically the full owner of your property if you’re still paying payments on it (or if you’ve taken out a second mortgage). When it comes to autos, the same concept applies: you must make car repairs while still paying off your car loan because you don’t totally own your vehicle.

The lienholder — the bank or whoever owns your home – will almost certainly demand that you restore it to its pre-loss condition.

The reason for this is straightforward: your home serves as security for your loan. When such collateral is damaged, its value plummets, putting the loan’s value in jeopardy. Finally, if you’re still making mortgage (or second mortgage) payments, your bank has the authority to demand that repairs be made – and they may choose a specific person or company to do so.

Home Repairs May Be More Complex Than You Think

Many homeowners have overestimated their ability to fix their homes. You may have had a minor issue with your residence. Your insurance company sends you a $10,000 check. You laugh and imagine that fixing the problem will only take a trip to Home Depot and a few weekends of your own time.

The truth is that home repairs are more complicated than most people think. Many homeowners underestimate the amount of labor required to return their home to its pre-loss state.

If you undervalue the amount of work that needs to be done on your house, your insurance provider may offer you with a lower check than you require or deserve. That’s why, after substantial losses or damages to your own house, it’s always a good idea to have an impartial assessment.

If you have any questions, need assistance determining the right cost of repairs, or need aid with any other element of your insurance claim, a state qualified Public Adjuster can help. Simply contact us for a free consultation, and we would be happy to assist you.

If You Don’t Fix your Home Today, You Could Sacrifice Future Claims

One additional point to consider when it comes to pocketing the difference on homeowner’s insurance claims: if you don’t solve the problem appropriately now, you may end up compromising future claims on your policy.

After all, your insurance company paid for the repairs to get your house back to its pre-loss state. They anticipate that once these money have been provided, your home will be restored to its pre-loss condition.

If you have another event and need to file a claim under your insurance policy, your insurance company may refuse to reimburse the additional damages.

Let’s pretend you had a little fire in your house and filed a fire insurance claim. Your home’s electrical wiring was damaged by the fire. You hired your brother-in-law Dave to do the repairs instead of engaging a professional, qualified electrician. Dave patched everything together, and everything appeared to be in good working order. Then, due to Dave’s terrible labor, your home suffers an electrical fire a few weeks later. You lose everything when your house burns down. Because you didn’t fully restore your home to its pre-loss condition, your insurance company may refuse to compensate you in this scenario.

You Will Receive a Check for the Items in your Home, But You Can Decide How to Spend that Check

The contents of your home may be covered by your homeowner’s insurance policy. Your insurance company is required to send you a payment for the worth of your items if they are damaged.

The insurance provider, on the other hand, does not oblige you to purchase the same products again. Instead, they may send you a cheque for the products’ actual cash value (ACV). You have complete discretion over how you spend the check. You may, for example, choose to buy less expensive furnishings and save the difference.

Finally, the insurance company must pay the exact amount needed to restore your property to its original condition. Your insurance provider will issue you a cheque to reimburse you for the costs of restoring your house to its pre-loss state.

If your bank owns your house (for example, if you’re still making mortgage or second mortgage payments), your bank may require you to choose a specific contractor to undertake repairs.

If you own your home outright, though, you have complete freedom to fix it as you see fit. You can, for example, hire a less expensive contractor or do the repairs yourself. You may even take the money and use it to go on a vacation instead of fixing your house.

However, if your DIY repair or low-cost contractor does a poor job, you may be unable to pursue a claim on your insurance coverage in the future. Your insurance provider may refuse to cover future claims if you do not return your home to its pre-loss condition.

Finally, as long as you understand the regulations and limitations, you are free to spend your homeowners insurance claim payment as you see fit. In most circumstances, however, hiring a qualified specialist to restore your property to its pre-loss condition is your best option.

Should roofer meet with adjuster?

This is a common question, and one that some people are concerned about. There’s no need to be concerned; having an adjuster meet with your roofer is the same of having an advocate. An advocate provides assistance and works on your behalf to ensure that you achieve the best possible results. This is what a trained roofer can do for a homeowner whose roof has been damaged by a storm.

Having a roofer you trust meet with your insurance adjuster after the roofer has discovered damage that necessitates filing a claim is a fantastic idea.

The roofer will work with your insurance company to demonstrate their adjuster every area of storm damage, including gutters, ridge caps, air conditioner coils, and window screens, which may be ignored.

After instance, roofing is a roofer’s specialty, but an adjuster may not have much experience with a roof, so it’s a good idea for the two of them to talk about the damage so that nothing goes unnoticed. Your roofer can also provide the adjuster with measurements for the roof and any other structures on your property. This expedites the adjuster’s visit to your home and may result in a faster answer to your claim.

Does mortgage company have to endorse insurance check?

Q: Why can’t I just deposit my insurance checks and use them? When I paid the insurance premiums, why did it have to go through my mortgage company first?

When you borrowed money to buy your home, you agreed that one way the mortgage company would be covered was for the mortgage company to be co-insured with you for any damage to your property “enhancements”

If you take your insurance rebuild money and go, your mortgage documents are put up to protect the mortgage company. In other words, your home and property are the loan’s collateral; if you cash the insurance checks but do not rebuild, the mortgage company will have a problem. The loan and insurance documents have systems in place to keep you from doing so.

Unless and until your mortgage company agrees (in writing), every Coverage A check you receive, as well as maybe some of your other coverage checks, will state something like: “Pay to Jane Doe and Jane Doe’s Mortgage Company’s order.”

You must first endorse/sign the check, after which your mortgage company will deposit the funds in its own account and then release the funds to you once you have begun the process of reconstructing your home.

A: Possibly. They could also be listed on checks for “Other Structures,” “Landscaping,” and so on. In paragraph 5, it is also stated:

If Borrower obtains any kind of insurance coverage for damage to, or destruction of, the Property that is not otherwise required by Lender, such policy shall include a typical mortgage clause and shall designate Lender as mortgagee and/or as an extra loss payee…

As a general rule, consider that the mortgage company will seek to be treated as a co-insured on insurance coverage for those items that will or must remain on the property after the house is sold, such as plants, grass, the house, the fence, and the driveway.

However, insurance companies frequently merely co-write Coverage A checks, and Loss Departments rarely object.

Q: Does the lender get to keep more money than the remaining amount I owe them on my mortgage if the insurance checks total more than my mortgage?

A: The mortgage firm should not be permitted to keep insurance proceeds in excess of the loan’s remaining balance. You merely agree in paragraph 5 of the standard California mortgage “… to assign to the holder of the Note broad rights to insurance proceeds up to the amount of the existing loan debt.” As a result, some mortgage companies have a written policy stating that they will only retain funds up to the amount of the outstanding loan balance.

Q: If the policy is already included in the mortgage, why does the company require it?

A: The mortgage firm has a specialized division (the “After you’ve experienced a catastrophic property loss, you’ll have a “Loss Department” that manages the rebuilding funds. This task is frequently delegated to a third-party firm. In either case, the persons you contact with may be unaware of the terms of the mortgage.

Knowledge is a powerful tool. Don’t give up. Read and comprehend your texts, then put what you’ve learned to good use. In general, the Loss Department is not user-friendly. Expect the following to occur:

  • The “Loss Department” will not reimburse you the extra money unless you ask for it, or until you request it.
  • It’s impossible to get through to a real person in the Loss Department at all, or to get through to a live human being at all.
  • Instead of a response that answers your questions, you get a form response to your mails.

Q: Is the mortgage company going to pay me interest on the insurance funds they have on hand?

A: Almost certainly, but not always without a battle. The conventional California mortgage additionally stipulates in paragraph 5: “Lender shall not be compelled to pay Borrower any interest or earnings on such insurance proceeds unless an agreement in writing is established or Applicable Law requires payment of interest on such proceeds.”

Fortunately, California does, in certain ways, have an advantage “the legislation that applies.” According to the California Civil Code:

(a) Every financial institution that makes loans or purchases obligations secured by real property containing only one to four family residences and located in this state and receives money in advance for payment of taxes and assessments on the property, insurance, or other purposes relating to the property must pay interest on the amount held to the borrower. Such amounts shall bear interest at a rate of at least 2% simple interest per annum. The interest will be credited to the borrower’s account once a year or when the account is terminated, whichever comes first.”

Many consumers have been successful in convincing their mortgage company that insurance profits checks to support a rebuild are acceptable “money in advance for payment… for… property-related purposes,” as defined by Code Section 2954.8. Simply put, they receive a 2% interest rate.

CAUTION: We are not aware of anyone who has ever taken this issue all the way to court, so there is no precedent “Final” response

Q: What other steps can I take to ensure that I earn interest on my insurance payments?

A: You could try an alternative line of reasoning. Miller & Starr California Real Estate, the main book on California real estate law, claims that a California court ruling states that if a mortgage firm holds the money in an interest-bearing account, the interest is yours. (This argument is included in Miller & Starr’s treatise California Real Estate, section 10:61.)

Survivors of catastrophic losses have used a number of creative methods to recoup the interest on their insurance benefits. One Cedar Fire survivor requested a copy of the deposit slip indicating the account number into which the money were deposited, as well as the account records for that account showing that funds held there bore no interest or were invested. The mortgage business chose to pay the interest rather than comply with the demand. This example demonstrates that being a pain in the neck might sometimes be more important than whether the statute applies.

A: Not as rapidly as you may think. Let us return to paragraph 5 of the typical California mortgage, which states,

“Lender shall have the right to keep such insurance proceeds during the repair and restoration period… Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed.”

Q: However, my contractor will not agree to reconstruct my complete home without first receiving payment. What options do I have?

A: You’re correct–a it’s “The “business reality” is that a builder will not complete all of the job before receiving any payment. It’s also a “However, most builders are accustomed to working in a situation where they are not paid in full up front, but rather get partial, monthly payments with at least some money put back until the job is completed.

This is something that your mortgage provider is aware of. Because your mortgage requires you to repair or restore your home after a fire, the mortgage company will not hold all of the funds until the end, as this could be a risk “The implied covenant of good faith and fair dealing has been broken.” To avoid being sued, the corporation must play by the rules. As a result, you will receive the funds “Payments in process.”

A standard progress payment strategy is to release 1/3 of the retained funds up front, 1/3 after a 50 percent completion inspection, and 1/3 after a 100 percent completion inspection. There will most likely be none “Until you’re 3/4 of the way through building, don’t worry about the “shortfall issue.”

Q: If I don’t want the money to be used to pay down the mortgage, can the mortgage company just use it?

  • Keep a record of EVERY PERSON you speak with, including their name and phone number (as well as the name of their superior and that person’s phone number).
  • Treating you well would help them with public relations, something they desperately need in this “sub-prime crisis”!
  • You are most likely not their only borrower who has lost a home in your neighborhood. If a trial is held to evaluate whether or not they are treating you fairly, then:

1. It will be on behalf of ALL of their borrowers who have lost their houses as a result of the disaster.

2. Each juror will be one of the following: (a) someone who has lost their home, (b) someone who knows someone who has lost their home, or (c) someone who thinks to themselves, “Oh my goodness, I could lose my home!”

  • Request documentation from the mortgage firm regarding what happens to the money while it is in their possession (does it earn interest, and if not, is it invested?) – the answer may be unsettling for them, which is beneficial to you.

What happens if you don’t agree with insurance estimate?

First, you can ask the adjuster questions about the estimate. Don’t be scared to challenge and demand what you believe is right. You may not enjoy haggling, but it is often necessary in order to reach a fair agreement.

  • You can speak with an Oregon auto accident lawyer about filing a lawsuit against the person(s) who caused the damage to your vehicle. You can make a claim in small claims court if the total value of your claim is less than $7,500.

NOTE: If you need to file a case in District or Circuit Court, we strongly advise you to hire an experienced attorney.

  • You also have the option of paying for an independent appraisal, which will cost between $75 and $100. Your appraiser will talk about the differences and try to reach an agreement.

If you don’t agree with the compromise, the issue will be settled by a third impartial assessor (similar to an umpire). The expense will be split evenly between you and the insurance company. This method is also utilized in cases where the market worth of your vehicle is in dispute “Total loss” scenarios

Beware! These options can be time-consuming, and the insurance company simply needs to cover the cost of a rental car until a settlement is reached “Even if that offer differs from what is ultimately agreed upon, a “fair” offer is made.

Can I ignore insurance adjuster?

Prevent formal and casual interactions if you want to avoid being duped by an insurance adjuster. If they persist, ignore them until you consult with a lawyer.

Are insurance adjusters honest?

NO is the common answer to this question. This is not to say that all insurance adjusters are untrustworthy. It’s crucial to keep in mind, though, that all insurance adjusters have a certain amount of allegiance to their company. Because of this devotion, the adjustor may attempt to offer you the lowest feasible settlement so that the corporation does not lose money on your claim.

Many individuals have never heard of an insurance adjuster. If you make the mistake of believing that an insurance company is looking out for your best interests, you will almost certainly receive a lower payout than you deserve.

Is there a downside to filing a homeowners insurance claim?

Review any gaps in your insurance coverage once your claim is resolved and make modifications to ensure you’re adequately protected in the future.

Filing a claim may affect your premiums, depending on your insurance company and claims history. Insurers typically look at losses related to a home from the previous five years when determining rates. Insurers may perceive your property as high-risk if you file repeated claims inside that time limit.

Whether your insurance company raises your rates, see if there are any methods to save money, such as bundling your home and auto policies or boosting your deductible. If you’re still unhappy, shop elsewhere for a better deal.