After a water or fire loss, your adjuster may give you the name of a restoration company. That can be helpful when water is still on the floor. It also raises a fair question. Do you have to use that company? Here is what the Illinois Department of Insurance, Illinois claim rules and the National Association of Insurance Commissioners (NAIC) actually say.
Who hires the restoration company after a loss?
In the guidance we reviewed, you do. The Illinois Department of Insurance’s Property Insurance Consumer Guide tells consumers to take these steps.
- Deal with local, reputable contractors, and check them with the Better Business Bureau or the Illinois Attorney General’s Office.
- Get a detailed estimate from a licensed contractor.
- Discuss payment terms before signing anything.
- Get approval from your insurance adjuster before you contract for repairs.
The NAIC’s claims guide gives similar advice. It says to use local or trusted companies, ask friends and family for references and get multiple bids. It also says “Your insurer may also have recommendations,” and notes that your adjuster may want to review estimates before repairs begin.
To be precise, none of these sources uses the phrase “right to choose.” What they describe is a process where you select and contract with the company, and the insurer reviews the estimate and decides what the policy pays. Your policy’s terms still control coverage.
What does Illinois require when estimates differ?
Illinois rules get specific here. Section 919.80(d)(7)(C) of Title 50 of the Illinois Administrative Code covers partial losses settled on a written estimate prepared by or for the insurance company. It sets out four steps.
- The company must give you a copy of the estimate its settlement is based on, if you ask for it.
- That estimate must be reasonable, follow the policy and be enough to allow repairs “in a workmanlike manner.”
- If you get your own written estimate showing necessary repairs will cost more, the company must “review and respond promptly in writing” and give you the name of a repair shop or contractor that will make the repairs in a workmanlike manner.
- If the company does not name a contractor, it must give you written notice that “any and all reasonable costs incurred for repair or replacement related to the partial loss in excess of the company’s estimate will be reimbursed.”
The rule applies to fire and extended coverage policies as defined in 215 ILCS 5/143.13. That definition covers real property used mainly for residential purposes up to and including a four-family dwelling, plus household and personal property.
Notice how the rule is built. It expects that you may bring your own written estimate, and it gives the insurer two ways to respond when yours is higher.
Can you call a restoration company before the adjuster arrives?
For emergency work, yes. The Department of Insurance says “It is your responsibility to mitigate against the possibility of further damages,” and its examples include removing standing water and boarding windows. The NAIC says insurance will typically reimburse the cost of these temporary repairs as part of your claim, assuming the loss was covered. The EPA adds that water-damaged areas and items should be dried within 24 to 48 hours to prevent mold growth.
The NAIC also advises that you contact your insurance company to file a claim before you hire a contractor. Put together, the order usually looks like this.
- Report the claim to your agent or insurer.
- Have emergency mitigation done, such as water damage restoration or storm damage board-up.
- Save every receipt and take photos.
- Get your adjuster’s approval before you sign a contract for permanent repairs.
How should you check a restoration company?
The NAIC and the Illinois Attorney General list what to ask for before you hire anyone.
| Ask for | Why it matters | Source |
|---|---|---|
| A business license | The NAIC says to make sure it is not expired | NAIC |
| Proof of liability insurance | The NAIC suggests calling the insurer to verify coverage | NAIC |
| Proof of workers’ compensation insurance | The NAIC lists it among documents to collect before hiring | NAIC |
| Public liability and property damage insurance | Required by the Home Repair and Remodeling Act | Illinois Attorney General |
| A written contract for work over $1,000 | Must state the total cost, parts and materials, and the business name and address | 815 ILCS 513/15 |
| The “Home Repair: Know Your Consumer Rights” brochure | Contractors must provide it | 815 ILCS 513/20 |
A few more cautions from the same sources are worth keeping in mind.
- The NAIC says “A reputable business will not pressure you to make a quick decision, nor will it ask you to pay money upfront.”
- The NAIC warns against signing a blank contract and urges caution with an assignment of benefits, which lets a third party act for you and can allow direct payment from the insurer.
- The Attorney General says you can cancel within three business days if you signed based on the contractor’s visit to your home. In the case of disaster repair, you can cancel within five days of your insurer’s denial of coverage.
- The Attorney General also notes that roofers must be licensed by the Illinois Department of Financial and Professional Regulation and plumbers by the Illinois Department of Public Health.
What if you and the insurer still disagree?
Start by asking for a copy of the insurer’s estimate, which Section 919.80(d)(7)(C) entitles you to on request. If the insurer denies the claim or offers less than you asked for, Section 919.50(a)(1) requires a written explanation within 30 days after the investigation and determination of liability is completed. That letter must cite the policy provision involved and include a Notice of Availability of the Department of Insurance.
You can call the Department’s Consumer Assistance Hotline at (866) 445-5364. You may also hire a public adjuster, though the Department notes you do not have to. Public adjusters usually charge 10 percent or more of the claim, and those fees are not covered by insurance. Our insurance claims page explains how we share our documentation with you and your adjuster.
This article is general information, not legal or insurance advice. Check your own policy and talk with your agent, your adjuster or an attorney before you make decisions about your claim.
When to call a restoration company
Call when you have water, fire or smoke damage and want it handled by a company you picked. A person answers 24/7. We ask what happened, what is affected and whether you have already reported the claim. Then we send a crew to stop the damage and start drying or securing the property. We document everything with photos, moisture readings and written notes, so you and your adjuster are working from the same record. Contact us any time.