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Property Damage – Insurance Claims & Payments FAQs

By Luke Armstrong

The estimate I received from my insurance company is not exactly the same as the restoration contractor’s estimate. Why the difference?

The insurance adjuster may write an estimate and supply you with a copy. The scope of work between the restoration contractor’s estimate and the insurance adjuster’s estimate may differ in some areas. However, the restoration contractor and your insurance company will have decided on the agreed figure. The price should be set before the start of your project. By using the estimate, the project manager can make sure the entire project is managed properly and every aspect of the project is contained in the scope of work.

Fire DamageWhat if the insurance check is made payable to both me and the restoration company?

There’s a good chance the check you receive from the insurance company will be made payable to you and the restoration company. It may also include the name of your mortgage company. If a mortgage company is named on the check, it is your responsibility to make arrangements to have them release the check and set up any required inspections. As soon as you receive any insurance checks, contact the restoration company immediately and let them know to whom the check is made payable. Also, please make sure the CORRECT mortgage company is named on the check.

Do I pay the restoration company when the project is complete, or will I make periodic payments at various stages of the construction process?

When you pay depends on the size of your project. Usually if your claim is under $10,000, payment is due within 30 days of the date of the invoice sent to you. Usually if your claim is over $10,000, a partial payment (draw) will be due at the end of the drywall stage. The remaining charges will be due within days of the date of the invoice. If a mortgage company’s name is on the partial payment check and there are complications getting funds released by the mortgage company, the project could slow down or be suspended until payment has been made. It is important for insureds to be diligent in getting their mortgage companies to release any funds so that the project proceeds smoothly and on time.

Can I have additional work done at my home (not insurance related) at the same time the insurance work is being done since workers will already be on site?

Yes, as long as it works within each party’s schedule and time frame. All additional work should be agreed to on change orders prior to the start of work.

To whom do I pay my deductible?

The deductible is the first dollar amount paid by the insured on each claim. It normally is expensed in one of two ways: paid to the restoration company or paid to the general contractor.

How do I get an endorsement from the mortgage company on my insurance check?

A check endorsement from a mortgage company is normally obtained by filling out paperwork/packets from your mortgage company. If you are not issued one, you should contact them immediately.

Can I choose which contractor will do the work at my house?

It is the insured’s/homeowner’s right to have their contractor of choice perform the repairs on all insurance claims.

Who should I call first when I have a property claim?

Generally, whenever you have a property damage claim, you should contact your insurance company to file the claim immediately. However, it is your responsibility as an insured to minimize the damage, which may include contacting a certified drying or restoration professional.

What is depreciation?

Depreciation is the value that represents the wear and tear of materials over a given period of time. Almost all materials have a normal life expectancy or amount of time they will last before they expire.

What does ACV mean?

Actual Cash Value is the value of the loss after depreciation has been removed. In replacement cost policies, the depreciated amount will be recoverable if the loss is reconstructed.


Courtesy of ServiceMaster 380