When you purchase a homeowners insurance policy, one of the decisions to be made is at what price point you want to set your deductible. The deductible is the amount you must pay personally BEFORE the insurance company steps in to cover the remainder of the loss amount. Essentially, you are self-insured up to the amount of your deductible.
When you file an insurance claim, either the insurance adjuster or a contractor, such as Champion Construction, will write a repair estimate. Let’s say you had a $500 deductible, and the claim total was $5,000. The insurance company would issue a check for $4,500, with you personally owing the remaining $500. So, now you have a check for $4,500 and you want to know if the contractor can repair your home for that amount ONLY, saving you $500 hard-earned dollars. The short answer is “No”, but let’s take a step back into history for a moment.
You may recall the days of long ago when you could send in three estimates to the insurance company and they would pay an average of those bids, and then you could get the guy with the lowest estimate to do the work. This choice might have saved your entire deductible, with even a little more to spare. Of course, the cheapest bid is not necessarily the best choice, as many corners are usually cut resulting in sub-par work quality. In the end, many homeowners had to spend even more money to have the work corrected.
Alas, in this modern era, insurance companies are as intent on saving every penny, just as most of us individuals are. Thus, they utilize estimating programs (i.e. MSB/Integraclaim, Xactimate, Simsol, etc.) to prepare very detailed repair estimates. Gone are the days of the contractor “throwing in a few extra dollars here and there” to cover your deductible. The most current estimating systems allow a fair price to indemnify the homeowner (return the home to its pre-loss condition) but do not allow any gray area for crediting deductibles. That having been said, we have had occasion when a homeowner was willing to perform some of the work themselves (i.e. moving their own contents, minor painting, etc.) and we could credit that portion of the claim proceeds toward their deductible.
The bottom line is to set your deductible at a price that is comfortable for you to pay in the event that you have a claim.
Last updated on May 3, 2011 by Champion