Does My Homeowner’s Insurance Company or Do I Select a Contractor for Repairs?

In the aftermath of an event that causes damage to your home you undoubtedly will have a myriad of important questions and concerns. One key question and concern that you face is whether you or your insurance company select a contractor for needed repairs to your residence.

There are two elements that come into play in answering the query about who selects a contractor for home repairs: state law and the terms of an insurance policy.

State Law

In years gone by, insurance companies had more authority over dictating where a car could be repaired or what contractor could be utilized to address damages to a residence. Generally speaking, across the United States, those days are gone.

State laws in the U.S. permit homeowners the ability to make a final decision about which contractor or contractors will work on making repairs following some sort of damage-causing event. You might conclude that this answers the question about who selects a contractor for work on a residence. The reality is that the matter of selecting a contractor is rather more complicated than recognizing applicable state law where you happen to live.

Preferred Providers

Even though state law prevents an insurance company from dictating what contractor you can utilize to repair your home as part of an insurance claim, the insurer is likely to maintain what oftentimes is called a preferred provider list. This is a list of contractors that an insurance company likely has worked with previously and with which an insurer has developed some protocols regarding costs.

You will be provided a list of preferred providers. You may even be pressured to select from a list of preferred providers. Indeed, there are more than a few examples of insurance company representatives leaving homeowners believing that they must select a contractor from this list despite the law in a particular state.

On some level, an insurance company is not obliged to do your homework or your due diligence regarding your complete set of rights as an insured. However, is an insurance company misleads or deceives you, that is likely to be considered an unlawful claims settlement practice.

Noting these points, there are many instances when selecting from an insurer’s list of preferred providers makes sense. An insurance company typically strives to have qualified contractors on its list of preferred providers. Moreover, an insurer will have at least some working experience with the contractors on its preferred provider list, a reality that can make the repair and claims settlement process somewhat smoother in many instances.

Selecting Your Own Contractor

As discussed, you do have the essential right to select a contractor to address repairs on your residence as part of an insurance claim. With that said, if you are going to select a contractor from beyond the insurer’s preferred provider list, you need to coordinate the engagement with the insurance company claim’s adjuster.

Depending on the terms and conditions of your insurance policy, there may be some specific qualifications that a contractor needs to satisfy in order for the policy to cover costs incurred in the repair process. In order to ensure that such requirements are satisfied with a particular contractor, you need to coordinate the hiring of the contractor and verification from the insurer that the selection is suitable.

A contractor that is not on an insurance company’s preferred list may also have to do some negotiating regarding charges for repair work. There may be instances in which a contractor’s charges are above what an insurer will pay.

If a contractor isn’t fully reimbursed by an insurance company, you become responsible for the difference between what was charged and what was paid by the insurer. If the lines of communication are kept open between you, the insurance company, and the contractor, you place yourself in the best position to engage a qualified contractor, have the insurance cover the repair, and limit your own out-of-pocket expenses.

State Insurance Commissioner or Department

If you find you have issues regarding the selection of a contractor and your homeowner’s insurance company, you can reach out to the insurance commissioner or department in your state. An insurance commissioner or department maintains a consumer assistance division or staff aid people with an array of issues, including those that might arise in a situation involving an insurer, you, and a contractor.