Written by Andy Gurczak

September 22, 2022

Should You Make Your Own Insurance Claim Repairs?

Should You Make Your Own Insurance Claim Repairs?

Let’s say you had a small fire in your home. Faulty electrical wiring caused the fire. Of course, someone will have to tear down parts of the wall where the fire started. Then someone will have to hang new sheetrock and paint it. You’re pretty handy around the house. You’re thinking, should you make your own insurance claim repairs?

First, you file a homeowners’ insurance claim. You get detailed estimates to repair your home. claim. Then the claim settles.

Typically, your homeowner’s insurance company will either pay the cost of repairs to the contractor you selected or send you a check for this amount.

At this point, you can hire a contractor to complete repairs on your home. Or, in some cases, you can complete the repairs yourself.

You also may just leave your home as-is and pocket the claim settlement.

However, that last option may not be available to you.

For instance, if you have a mortgage on your home, your lender may have a say in who performs repairs to your house. Indeed, the mortgage company may not let you do the repairs to your home.

Why? It’s simple. Your home is the collateral for your mortgage. When that collateral is damaged, its value drops and threatens the value of the loan.

Indeed, one common clause in mortgage contracts says that your lender must be named on any insurance claim checks.

Therefore, if you have this clause in your mortgage, some or all the funds the homeowners’ insurance company sends have both your name and your bank’s name on the check.

Usually, the insurance company sends the check to the bank/mortgage company. The bank will place the money in escrow. Then the mortgage company will pay the contractors who repair your home directly once they complete the repairs.

The bank controls the money and has an interest in making sure that your house is repaired well. As a result, it may not allow you to do the work yourself.

Consequently, first check with your mortgage company to see if it permits self-repairs.

Are You a Licensed Electrician or Plumber?

The fire or storm that damaged your home resulted in damage to the plumbing and

electrical systems. Unless you are a licensed plumber or electrician, you should not attempt those repairs. First, if you’re not licensed to carry out the work, you may be responsible for additional costs if the repairs don’t go as well as you’d planned.

For example, say you fixed the electrical system. A year later, there is a fire in your home. If a claims adjuster determines faulty electrical repairs from a year ago caused the fire, typical homeowner’s insurance companies will deny coverage for the recent fire.

Additionally, local town ordinances or state laws may not permit you to do the repairs. Depending on the seriousness of the damage to your home and the laws where you live, you may be required to get a permit from your city or have a license to do the repairs.

Once again, your mortgage lender may not let you do those specialized repairs.

What Repairs Can You Do?

Conversely, there may be some repair work that your property insurance company and mortgage lender might permit.

For instance, if the fire or storm caused a total loss to your home, there would be a lot of debris to remove. The mortgage company and/or property insurance carrier may let you remove the debris and pay you for it.

If rooms were damaged and walls had to be sheetrocked, the insurer may let you paint the rooms and bill them for it.

Likewise, if you want to put up new wallpaper, they may let you do it.

In short, homeowners’ insurance companies may permit insureds to do simple repair jobs. The insureds can receive a check for labor and materials to complete the repairs.

What About Personal Property that Is Damaged?

Your homeowner’s insurance also covers the items inside your home. This includes furniture, appliances, clothing, etc. Therefore, if the peril damages those items, your insurance company will send you a check for the actual cash value (ACV) of those items on the date they were damaged.

However, the insurance company doesn’t require you to purchase those same items again. You’re free to spend that check however you like. You might choose to buy cheaper furniture, for example, and pocket the difference.

Now, if you have replacement cost value (RCV) coverage, the insurer will send you two checks. The first check is the RCV check for the damaged property. Then, you must go out and buy new items to replace the damaged ones.

You then send receipts to the insurance company. The insurer will then send you a check to cover the additional costs to buy new items.

Bottom Line-Is Making your Own Insurance Claim Repairs Worth the Time and Effort?

In reality, determine whether the amount of money you’ll save is worth the time and effort. Indeed, this is true especially if you are not already an accomplished DIYer.

The amount your insurance adjuster will pay you to make your own insurance claim repairs will depend on the repairs, the size of the claim, and your insurer’s policies.

Lastly, if the damage is relatively minor or cosmetic and you’re considering repairing it yourself, why file a claim? It may be cheaper and simpler to take care of the work yourself and not involve your home insurance company.

If You want to Make Your Own Insurance Claim Repairs, Give AllCity Adjusters a Call

We are a family-owned claims company with five decades of combined adjusting experience. Consequently, if there’s one thing we understand, it’s that you need 100% of your claim value.

The first thing to remember is that we are experts on all types of home insurance policies. Moreover, we can review your policy with you to find out exactly what insurance coverage you have for the damage to your home.

We can tell you what repairs the insurance company will permit you to do. In addition, we’ll let you know which repairs you shouldn’t attempt and why.

Don’t get fooled, get the company that gets you more. Call us today at 844.692.3587. Or you can visit our website to find an office near you.

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At AllCity Adjusting we help residential and commercial clients alike get the claims support they need. Moreover, we have over 50 years of combined experience helping get our clients the max settlement time and time again. If your claim has been low balled or denied entirely we can help increase your maximum settlement. Call us today for a FREE consultation. Experience the AllCity difference.

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