📋 Using Insurance for Home Repairs: How to Handle the Contractor Quote
A hailstorm, a burst pipe, a fallen tree. Something bad happened to your home, and now you are navigating two separate parties who both have opinions about how much it costs to fix: your insurance company and your contractor. Here is how to come out ahead.
The Insurance Estimate Is Not the Final Word
When an insurance adjuster visits your home, they produce an estimate using software called Xactimate, which is the industry standard for property damage claims. The Xactimate estimate is a starting point, not a cap. Contractors frequently find damage the adjuster missed, and insurance companies are legally required to pay for legitimate damage once documented.
Get Your Contractor Quote Before Accepting the Settlement
Do not accept or cash the initial insurance check before you have a contractor quote in hand. Once you cash the check and sign a settlement agreement, it can be very difficult to reopen the claim even if the contractor finds additional damage. The proper sequence is:
- Insurance adjuster visits and produces estimate
- You get a contractor quote (or two)
- Compare the two numbers
- Negotiate any gap before signing anything
When the Contractor Quote Is Higher Than the Insurance Estimate
This happens constantly. The gap exists because Xactimate uses regional averages that may not reflect actual local contractor pricing, and because adjusters sometimes miss damage or scope items. Here is what to do:
- Ask your contractor to provide a line-by-line comparison against the insurance estimate showing exactly where and why the numbers differ
- File a supplemental claim with the documented additional damage or pricing discrepancy
- Request a re-inspection if the adjuster clearly missed damage (document with photos)
- Hire a public adjuster if the gap is large (over $3,000) and the insurer is unresponsive. Public adjusters work on contingency (10-15% of the settlement increase) and are experienced at negotiating with carriers
Understanding Your Payout: ACV vs RCV
Most policies pay in two phases:
- ACV (Actual Cash Value): The depreciated value of what was damaged. Your 15-year-old roof with a remaining life of 5 years gets paid out at roughly 25% of replacement cost
- RCV (Replacement Cost Value): The full cost to replace the damage with new equivalent materials. You receive this only after completing repairs and submitting proof
The difference between ACV and RCV is called depreciation holdback. Do not forget to file for this after repairs are complete. Many homeowners leave this money on the table by not knowing to ask for it.
Beware of Assignment of Benefits (AOB) Contractors
Some contractors, particularly after storms, will ask you to sign an Assignment of Benefits form, which transfers your right to deal with the insurance company directly to them. AOB is legal in many states but means the contractor can negotiate, settle, and receive your insurance payment without your involvement. This works out fine with reputable contractors and becomes a serious problem with bad ones. Understand what you are signing.
What Your Contractor Cannot Do
It is insurance fraud for a contractor to waive your deductible as part of a deal to get your business. You are required to pay your deductible. Any contractor who offers to "cover your deductible" or "help with the deductible" is describing an arrangement that can expose you to fraud liability.
Documenting Everything
Take photos of all damage before any repairs start. Keep every receipt, invoice, and communication. If you do a repair yourself for anything covered under the claim, track your time and materials costs. Insurance companies pay for reasonable repairs made to prevent further damage (tarping a roof, for example), even before the claim is settled.
When you get a contractor quote for insurance work, you still want to make sure it is priced fairly. Use QuoteScore to verify the numbers before your contractor submits them to your insurer.