DIY Home Repairs: Can You Keep Your Insurance Claim Check and Fix It Yourself?

Summary

• Follow up questions:
  • Leftover money from home insurance claim
  • What happens if you don't use insurance money for repairs on home
  • How long do you have to make home repairs after insurance claim

DIY Home Repairs: Can You Keep Your Insurance Claim Check and Fix It Yourself?

Great question! For the most part the answer is yes, but there are conditions.

• Depending on the extent of your damage, you can use the money you receive from your insurance carrier to do repairs yourself. Before starting the project, always check with your mortgage company and confirm that its ok to do your own repairs.
• As I have said many times before, take photos. In this case, take before, during and after photos of your repairs. Then there will be no questions what you did.
• Remember, most policies have time limits in which you can complete your repairs in order to get your second check, which will be your replacement cost check. Most of the time it’s two years from the date of loss, but don’t trust me on your date, ask your agent.
• Make you a folder, whether it be physical or on your computer, and save all of your receipts.
• If you get the job done for less than what your loss settlement is, you can keep the excess money.
• If you keep the insurance settlement and do not do the repairs, be ready for the insurance company to deduct that amount they paid, if you have damage in the future on the same area.
• Keep in mind that if you’re doing your own work, or even have a contractor doing the work, it’s a great time to do upgrades. Your insurance company will not pay for upgrades, but normally the labor will stay the same, or less, and you will just be responsible for the increase cost in materials.
  • A good example is if you have laminate flooring damaged and decide to go back with real wood, then you would pay the difference in the cost of the material, and possibly some labor. This might be the only time you will get some financial help on an upgrade like this for your home.
• I would also suggest that you provide your agent with photos for your file in their office. That might save you a long conversation with your insurance carrier. One picture says a thousand words.
• If you find a discrepancy in your cost, or find additional damage while making repairs, immediately contact your claim representative and provide him/her photos. In many cases, the insurance company will pay for the unseen damage, but you need to get in touch with them immediately, and do not proceed with the repairs until your get instructions from your claim representative.

One more time, I am telling you to document every step and purchase.  This will save you a lot of headaches!