Fix the Damage or Cash Out

Your home is the largest investment that most people own.

When you have an insurance claim you have the option of having the property repaired by a reputable insurance restoration contractor or taking the money from the insurance company and either not repairing the property or repairing it yourself. In many cases if the damage is more than $7,500 to $10,000 the insurance company will put the bank on the check. (It then becomes harder to actually get the money)

In the event you hire the reputable insurance restoration contractor they will do the repair in full, negotiate the signing of the check or the property inspection by the lender who was named on the check and pay all of the bills on the job giving you a lien relaese at the end. This is by far the easiest form of settlement and repair.

If you decide to cash out the claim your insurance company will prepare an estimate, pay you a depreciated amount (70% - 80%) of the claim and pay you the balance when the job is completed. You will only get the full dollar amount if all of the repairs are completed. You as the owner will have to fund all of the repairs "out of pocket" before you have the money. This is a considerable strain on finances. The larger the job the harder it is to fund the supplies and labor. You will also find that if a reputable contractor who is actually going to do the work writes the estimate it will be more complete than most insurance adjusters will write as the contractor is the one who is going to do the work.

In the event you do the job yourself you will not have a warranty should your work fail. A repautable contractor will warrant their work for a minimum of one year.

Since this is your largest investment it is important to keep your home in good repair so that it is a liquid asset that you can sell at any time. If you take the money and not complete repairs you have a home that may not be saleable in the market should you need to sell. Your home would then sell for far less than the real value.

Donn Peacock
Owner