The short answer
In most cases the money for a covered fire repair comes from your property insurance policy, less your deductible, and the rest comes from you. The owner signs the repair contract and the owner owes the contractor. The insurer pays the owner according to the policy. Those are two separate relationships, and keeping them separate protects you.
Start with the policy
The declarations page lists your coverage limits and your deductible. A typical homeowner policy has separate parts for the dwelling, other structures, personal belongings and loss of use, which is the part that can help with temporary housing. Whether a given loss is covered, and under which part, is decided under the policy language. Read yours, or ask your agent to walk you through it before the adjuster arrives.
The deductible is yours
The deductible is the part of a covered loss you pay yourself. If a covered repair is priced at a given amount and your deductible is a smaller amount, the insurer's payment is the difference. Texas Insurance Code Chapter 707 puts the duty to pay the deductible on the insured, and Texas has rules aimed at contractors who advertise or promise to cover, waive or rebate it. FMGC does not waive or absorb deductibles. If a contractor tells you the deductible will not be charged, treat that as a warning about the contractor.
Actual cash value versus replacement cost
The Texas Department of Insurance describes the difference this way. A replacement cost policy pays to repair or replace damaged property at current prices. An actual cash value policy pays that amount minus depreciation for age and wear, which leaves you paying more. Replacement cost policies often pay in two stages: an initial payment, then the withheld depreciation once the work is finished. Texas Insurance Code Chapter 707 also lets an insurer hold back that depreciation until it has proof that the deductible was paid.
The practical result: you may need to fund part of the work before the second payment arrives. Ask your insurer how and when each payment is issued, and plan the payment schedule in your repair contract with that in mind.
Who does what
- The insurer's adjuster inspects the loss for the insurance company and writes an estimate that the payment is based on.
- A public adjuster is licensed by the state, works for you rather than the insurer, charges a fee, and cannot perform repairs or give legal advice.
- A contractor inspects the property, documents what is damaged, writes an itemized scope and price, and does the work. The contractor can attend the adjuster's inspection and discuss the scope there.
- An attorney advises on legal questions and coverage disputes.
Why the owner signs the contract
The property is yours, and so is the obligation to pay for repairing it. The insurance company is not a party to your contract with a contractor and does not promise to pay any particular bill. Claim checks are normally payable to you, and often also to your mortgage company. Endorsing a check, or getting the lender to release funds, is between you and your lender. A good contractor writes a contract that stands on its own whatever the insurer decides.
Texas bars contractors from acting as public adjusters
Texas Insurance Code section 4102.163 says that a contractor may not act as a public adjuster, or advertise to adjust claims, for a property on which the contractor provides or may provide contracting services. As we read it, that holds whether or not the contractor holds an adjuster license and whether or not the owner has signed a power of attorney or another agreement. The commissioner of insurance is directed to write the rules to carry it out. The statute is short enough to read in full on the Texas Statutes site, and we recommend that you do. This is our paraphrase and not legal advice.
That is why FMGC says plainly what it does: it inspects, documents, meets your adjuster on site, and writes an itemized scope. It does not negotiate your claim and does not advise you on coverage.
Red flags
- Storm chasers. Crews that arrive right after a disaster, have no local address you can verify, and leave a phone number that stops working.
- Deductible promises. "We will cover your deductible" or "it will not cost you anything" is exactly what Texas rules target.
- Claim-handling offers. Anyone who says they will negotiate with your insurer on your behalf or get you the most money.
- Cash up front. Large payments before materials are ordered or work begins, payment in cash without a receipt, or requests to sign over your claim check.
- No written scope. A lump-sum price with no line items, or a contract you are pushed to sign on the first visit.
- No proof of insurance. A contractor should be able to produce a certificate of insurance on request.
What to expect on timing
The Texas Department of Insurance consumer guide says insurers must acknowledge a claim within 15 days, accept or deny it within 15 business days after receiving what they need, and pay within five business days after agreeing to pay, with some exceptions. Confirm the current rules with the department if timing matters for your situation.
Common questions
- Can a contractor deal with my insurance company for me?
- A contractor can inspect, document, give you an itemized scope and meet the adjuster at the property. A contractor cannot act as your public adjuster or negotiate the claim. That is the owner's job, or the job of a licensed public adjuster or attorney.
- Will insurance cover the whole repair?
- Nobody can promise that before the insurer decides. Payment depends on your policy, the cause of loss, the deductible and how the insurer values the damage.
- Does the contractor's bid have to match the adjuster's estimate?
- No. They are written by different people for different purposes. When they differ, the owner and the insurer work out the difference, and the contractor can supply photographs and line-item detail.