Can an insurance company use their own contractor to establish the cost to repair fire damage to my own instead of contractors I select?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 12, 2012

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Insurance Question from Hanover, OH

Asked on 02/12/2012

Can an insurance company use their own contractor to establish the cost to repair fire damage to my own instead of contractors I select? I had fire damage to my home from a pellet stove; I had 3 well known, established, national contractors I selected from the phone book provide estoration estimates that were all in the $71,000 to $74,000 price range. The insurance company said those estimates were too high and hired a contractor to provide their own estimate which was in the $43,000 range. The contractor they hired was a small company from a small town from over 2 hours away from my property. Can they do this to establish the repair costs?

Answer given on February 13, 2012

They can get estimates of their own to determine reasonable cost.  However, is that same contractor going to travel two hours every day to do the work?  Is his cost of staying in a hotel in your area with men and crew added in the cost if not?  The fact is, a lower price from someone that is two hours away does not constitute reasonable unless that same contractor is willing to do the work.  You should do two things. First, contact your Department of Insurance for the State of Ohio and ask about the laws in your state with regards to having a contractor of your choice to do the work to your home. A small contractor might not be taking into consideration all the work that could be hidden that an experience contractor can foresee.  Secondly, compare the two estimates.  There has to be major difference in the two estimates resulting in a $30,000 difference!!!!! That is no small change! Get your contractors to review the lower estimate and write up something explaining what the other contractor left out and why that work is necessary.  Is the difference in material or work to be done?  Is it in labor cost? Perhaps your contractor is willing to give on labor cost to get the job.  All of this will help the insurance company see why the higher cost is necessary.   If all this fails to make the insurance company move, you may have to engage a lawyer that can contact the carrier and represent you in having your home repaired in a reputable manager.  Most attorneys will give free consultation.  To speak with an attorney in your area, click here. 

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