If it’s an insurance claim then the answer is generally, No. Getting estimates for repairs is actually not in your best interest and you are not required to do so. Your insurance company has created their own price list and will only pay for the cost of repairs at the lesser of their fixed price list OR the price you are charged by your contractor. So if their list says they will pay $15,000 for your repairs and you provide them with a final invoice showing you paid 13,000 for the repairs, then they are only going to pay $13,000 (minus your deductible). The majority of storm damage restoration companies will do your repairs for the amount the insurance company is paying. Your only out of pocket expense will be your deductible. Getting lowball estimates for your insurance company only saves them money and may provide you with an inferior product. You are legally entitled to use whatever contractor you choose and are not required to gather estimates.

Remember that all you are going to pay out of pocket is your deductible. That means for $1,000 (or whatever your deductible amount is) you can get a top quality first rate product from a highly reputable contractor or you can go with the lowest bidder and take your chances.

So by all means, feel free to interview several companies so you can find someone that you are confident will do a great job, use quality materials, and will be around for the warranty period. But when you get multiple estimates or use price as the determining factor, all you are doing is saving your insurance company money and possibly cheating yourself out of the quality job you deserve.

If I Find Someone to do the Work for less, can I Keep the Rest of the Insurance Money? In Colorado it is insurance fraud (both on your part and on the part of your contractor) for a contractor to pay, waive, or rebate any portion of the insurance deductible or for you to keep any amounts that the contractor has billed the insurance company for.

In addition to the prospect of getting into legal trouble (and insurance companies are cracking down on this type of activity) you have to understand that a company that is willing to commit insurance fraud, and induce you to do the same, is very likely to make up the amount they credited you by taking other shortcuts like using inferior products on your roof. Many of these companies are also from out of state and aren’t going to be around to perform any type of warranty work on that inferior job either. We’ve seen this many times and have even been featured on Fox 31 News to warn consumers about this issue.

Here are some examples of relating to the cost of repairs and what insurance will pay.

Example 1
Your insurance scope allocates a total of $10,000 to replace your roof and perform other repairs. Your deductible is $1,000. So you would get a total payment (ACV + recoverable depreciation – minus your deductible) of $9,000 from the insurance company.

If you choose a contractor to do the work for $9,000, you are legally required to pay the insurance company back the $1,000 you did not use. This is the classic example of the contractor paying your deductible.

Example 2
Your insurance scope allocates $10,000 to replace your roof and perform other repairs. Your deductible is $1,000, and your total withheld recoverable depreciation is $4,000, so you will get an initial check (ACV) for $6,000. Once the roof is compete you will get a second check (recoverable depreciation) for $3,000 which is the total replacement cost value minus your deductible. However:

If you choose a contractor to do the work for $9,000 you will only receive $2,000 of the recoverable depreciation because the amount of recoverable depreciation will be based on the lesser of the adjuster’s estimate or the actual costs incurred on the damaged areas only. You are entitled to the recoverable depreciation amount after repairs have been completed, ONLY TO THE EXTENT the cost of repairs exceeds the amount of your deductible and your initial payment.

Please remember that under Colorado law, you are not permitted to profit from your insurance claim by selecting a contractor that will do the work for less than the insurance allows. Since you are going to be paying exactly the same price (your deductible) no matter which contractor you use, we would encourage you to select the contractor that you believe will provide you with the best service and the best quality job.


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