Can I Use My Own Contractor on an Insurance Claim? A Policyholder's Guide
After suffering damage to your property, one of the most important decisions you'll make in the insurance claim process is choosing a contractor to repair the damage. Many policyholders wonder if they have the right to use their own contractor, rather than one recommended or preferred by their insurance company. The answer, in most cases, is yes - but there are several important considerations to keep in mind.
In this comprehensive guide, we'll explore your rights as a policyholder when it comes to choosing a contractor, the pros and cons of using your own contractor versus the insurance company's preferred vendor, and strategies for working with your chosen contractor to ensure a successful claim resolution. We'll also discuss what to do if you encounter pushback from your insurance company and when it might be necessary to involve a public adjuster or attorney.
Your Right to Choose a Contractor
First and foremost, it's important to understand that as a policyholder, you generally have the right to choose your own contractor for repairs covered under your insurance claim. This right is often explicitly stated in your insurance policy, and it's also protected by law in many states.
For example, California's Insurance Code Section 2695.9(a) states: "No insurer shall require that an automobile be repaired at a specific automotive repair dealer, as defined in Section 9880.1 of the Business and Professions Code."
While this law specifically references auto repairs, the principle extends to other types of insurance claims as well. Insurance companies cannot force you to use a particular contractor, nor can they penalize you for choosing your own contractor.
However, it's important to note that while you have the right to choose your own contractor, your insurance company also has the right to ensure that the contractor you choose is qualified, licensed, and capable of completing the necessary repairs at a reasonable cost. More on this later.
The Pros and Cons of Using Your Own Contractor
So, why might you choose to use your own contractor rather than one recommended by your insurance company? There are several potential benefits:
1. Familiarity and trust. If you have a contractor you've worked with before and trust, you may feel more comfortable having them handle your repairs. You know the quality of their work and their level of professionalism.
2. Local knowledge. A local contractor may have a better understanding of local building codes, permit requirements, and the unique challenges of your area (such as common weather-related issues).
3. Customization. If you want repairs done in a specific way or want to upgrade certain features of your property during the repair process, using your own contractor may give you more control over these decisions.
4. Avoiding potential conflicts of interest. Some policyholders worry that insurance company-recommended contractors might cut corners or use inferior materials to keep costs down, since they often have ongoing business relationships with the insurers.
However, there are also some potential drawbacks to consider:
1. Upfront payment. If you use your own contractor, you may need to pay them upfront and then seek reimbursement from your insurance company. With an insurance company-recommended contractor, the insurer often pays the contractor directly.
2. Potential for disputes with the insurance company. If your contractor's estimate is significantly higher than the insurance adjuster's estimate, or if the insurance company feels that certain repairs are not necessary, it could lead to disputes that delay your claim.
3. Responsibility for contractor's work. When you choose your own contractor, you take on more responsibility for ensuring that the work is done properly and in a timely manner. If issues arise, you may have to deal with them yourself rather than relying on the insurance company to intervene.
Ultimately, the decision to use your own contractor or an insurance company-recommended contractor comes down to your personal preference, your level of comfort with the claim process, and your specific repair needs.
Working with Your Chosen Contractor
If you do decide to use your own contractor, there are several steps you can take to ensure a smooth claim process and a successful repair:
1. Verify licensing and insurance.
Before hiring any contractor, verify that they are properly licensed and insured. Ask to see their contractor's license and proof of insurance, and verify the information with your state's licensing board and the insurance company. This protects you in case of any accidents or damage that may occur during the repair process.
2. Get detailed estimates.
Ask your contractor to provide a detailed, itemized estimate for all necessary repairs. The estimate should break down the costs for labor, materials, and any other expenses. Having a clear, thorough estimate can help prevent disputes with your insurance company over the scope and cost of repairs.
3. Keep your insurance company informed.
Let your insurance adjuster know that you'll be using your own contractor and provide them with the contractor's estimate. Keep the lines of communication open throughout the repair process, and notify your adjuster of any changes or additional damage discovered.
4. Document everything.
Keep detailed records of all communications with your contractor and your insurance company. Save emails, take notes during phone calls, and keep copies of all estimates, contracts, and receipts. This documentation can be invaluable if any disputes arise.
5. Pay attention to deadlines.
Most insurance policies require that repairs be completed within a certain timeframe. Work with your contractor to ensure that repairs are completed on time, and communicate any delays to your insurance company.
6. Inspect the work.
Before making final payment to your contractor, thoroughly inspect the completed work. Make sure all agreed-upon repairs have been completed to your satisfaction and that the work is up to code. If you spot any issues, address them with your contractor immediately.
By following these steps and maintaining clear, consistent communication with both your contractor and your insurance company, you can help ensure that your repairs are completed properly and that your claim is settled fairly.
Dealing with Insurance Company Pushback
While you have the right to use your own contractor, you may sometimes encounter pushback from your insurance company. Here are a few common scenarios and how to handle them:
1. The insurance company says your contractor's estimate is too high.
If your insurance adjuster believes your contractor's estimate is excessive, they may ask for a second estimate from one of their preferred vendors. In this case, you can:
- Ask your contractor to provide a more detailed breakdown of costs and justification for their estimate.
- Get additional estimates from other reputable contractors to show that your contractor's estimate is in line with market rates.
- Negotiate with your adjuster, using your gathered evidence to support your contractor's estimate.
2. The insurance company says certain repairs aren't necessary.
If your adjuster believes that certain repairs listed in your contractor's estimate are not necessary or not covered under your policy, they may refuse to pay for those items. In this situation:
- Ask your contractor to provide a detailed explanation of why the repairs are necessary, including any relevant building codes or safety considerations.
- Review your policy carefully to determine what is covered. If you believe the denied repairs are indeed covered, point to the relevant policy language.
- Consider hiring a public adjuster to assess the damage and provide an independent opinion on the necessary repairs.
3. The insurance company pressures you to use their preferred vendor.
If your insurance company is strongly pushing you to use their preferred contractor, remember that this is your decision. Politely but firmly reiterate your right to choose your own contractor, and ask the insurance company to respect your choice.
If you continue to face resistance or feel that your insurance company is not acting in good faith, it may be time to escalate the issue. This could involve filing a formal complaint with the insurance company, contacting your state's department of insurance, or consulting with an attorney specializing in insurance claims.
When to Involve a Public Adjuster or Attorney
In some cases, you may benefit from the professional assistance of a public adjuster or attorney when navigating the claim process and dealing with contractor issues.
Consider involving a public adjuster if:
- You are dealing with a large, complex claim and feel you need expert guidance.
- You are having difficulty getting your insurance company to approve necessary repairs.
- You feel your insurance company is significantly undervaluing your claim.
A public adjuster can assess your damage, provide an independent estimate for repairs, and negotiate with your insurance company on your behalf. They can also help you understand your policy and your rights as a policyholder.
Consider involving an attorney if:
- You believe your insurance company is acting in bad faith by unreasonably delaying, undervaluing, or denying your claim.
- Your insurance company is refusing to honor your right to choose your own contractor.
- Disputes with your insurance company have reached an impasse and you need legal advice or representation.
An attorney specializing in insurance claims can provide legal guidance, communicate with your insurance company on your behalf, and represent you in legal proceedings if necessary to protect your rights and ensure a fair claim resolution.
Checklist: Using Your Own Contractor
To sum up, here's a handy checklist to reference when using your own contractor on an insurance claim:
1. Review your policy to understand your rights and coverage.
2. Choose a reputable, licensed, and insured contractor.
3. Obtain a detailed, itemized estimate from your contractor.
4. Inform your insurance company that you'll be using your own contractor and provide them with the estimate.
5. Document all communications with your contractor and insurance company.
6. Ensure repairs are completed on time and to your satisfaction.
7. Inspect the work before making final payment.
8. Be prepared to negotiate with your insurance company and provide evidence to support your contractor's estimate.
9. Know when to seek the assistance of a public adjuster or attorney.
By following these steps and advocating for your rights, you can work with your chosen contractor to ensure quality repairs and a fair claim settlement.
The Bottom Line
Navigating the insurance claim process after property damage can be complex and stressful, but understanding your rights and options can help you take control of the situation. When it comes to choosing a contractor for repairs, remember that the choice is generally yours.
Using your own contractor can provide peace of mind, ensure repairs are done to your specifications, and potentially avoid conflicts of interest. However, it's crucial to choose a reputable, licensed contractor and to maintain clear communication with both your contractor and your insurance company throughout the process.
If you encounter pushback from your insurance company or feel that your rights are not being respected, don't hesitate to advocate for yourself or seek professional assistance. Public adjusters and attorneys specializing in insurance claims can be valuable allies in ensuring a fair claim resolution.
Ultimately, by being proactive, informed, and assertive, you can successfully navigate the claim process with your chosen contractor and achieve the best possible outcome for your property and your financial well-being. Remember, your insurance policy is a contract, and you have rights under that contract. Don't be afraid to stand up for those rights and insist on the quality repairs and fair compensation you deserve.