Water Damage Inquiry
Hello! I’m looking for some guidance on navigating the insurance process after experiencing water damage in my home. I live in Toronto, Canada, and our upstairs fridge leaked, causing flooding in the room below.
We hired a plumber to fix the leak, and after contacting our insurance, an adjuster came out to assess the damage. They informed me that someone will be coming tomorrow to demolish the affected area, which we have to pay for upfront. The adjuster advised us to keep all receipts, as insurance might cover those costs, but we’ve been paying out of pocket so far.
Once the demolition is complete, the adjuster will return to estimate the restoration costs. We then have the option to either use their recommended contractor or hire our own.
I work in construction and have several trusted renovators. If I choose to use my own contractor and get approval from insurance, will they disburse the funds as soon as the work begins, or will I still need to cover the costs upfront?
Thank you for your help!
Hi there! It sounds like you’re navigating quite a situation. Here’s a general outline of what you can expect with the insurance process in Canada, particularly in your case:
Initial Assessment: Since the adjustor has already inspected the damage, you’re on the right track. They will assess the damage and estimate costs for restoration.
Choosing Your Contractor: If you choose to hire your own contractor, make sure they’re aware of the insurance process. It’s a good idea to get detailed quotes and keep all documentation handy for the insurer.
Insurance Approval: After the initial assessment and once you decide on a contractor, you’ll need to inform your insurance adjustor. They should provide approval for the costs associated with the restoration work.
Payment Process: Typically, insurance companies will not pay contractors directly at the start of the work. They usually reimburse you after you submit the final invoices and proof of payment. However, some insurers might offer an advance payment upfront or a draw schedule during the project, especially if you’ve provided all necessary documentation. This can vary by policy and provider.
Keeping Receipts: As the adjustor mentioned, keep all receipts and invoices for any work done or materials purchased. Document everything, including communication with your contractor and any additional costs.
Out-of-Pocket Expenses: While some costs may be covered, you may still need to pay out-of-pocket for certain upfront expenses, depending on your policy and the agreements made with your insurance company.
Final Settlement: Once the restoration is complete and all necessary paperwork is submitted, your insurer should process the final claim and reimburse you for the covered amounts.
I recommend staying in close contact with your insurance adjustor and asking them about specific payment timelines and processes, as this can vary by provider. Good luck with the repairs, and I hope everything goes smoothly!