Insurance Companies Harming Insureds – And Putting Restoration Contractors Out Of Business

Did you know – if you suffer a loss to your home, under the California Regulations, Title 10, Chapter 5, subchapter 7.5, section 2695.9 provides that:

  • No insurance company shall require that the insured have the property repaired by a specific person or entity. Section 2695.9(b)
  • No insurance company shall even suggest or recommend that the insured have the property repaired by a specific person or entity unless (a) the insured specifically requests such a referral or (b) the insured is informed in writing of his or her right to have his or her own contractor. If the insured accepts the insurance company’s suggestion or recommendation, “the insurer shall cause the damaged property to be restored to no less than its condition prior to the loss and repaired in a manner which meets accepted trade standards for good and workmanlike construction at no additional cost” to the insured. Section 2695.9(c)
  • If the insurance company provides a repair estimate that is lower than the estimate prepared by the insured’s contractor’s estimate the insurance company MUST:
    Pay the difference between the insurance company’s estimate and a higher estimate obtained by the insured OR
    “Reasonably adjust any written estimate prepared by the repair individual or entity of the insured’s choice and provide a copy of the adjusted estimate to the claimant [insured].”  Section 2695.9(d)(1) and (3)

What Does This Mean To Insureds And To Contractors?


You, the homeowner insured, are entitled to use the general contractor of your choice.  Why is it important that you be entitled to use the general contractor of your choice?  Because the insurance company “preferred contractors” often submit incomplete or low estimates ‑ that is how they become that insurance company’s “preferred contractors.”  You need to be able to have your home repaired by a contractor you trust, and who will repair your home in a good workmanlike manner.

If you the insured use the insurance company’s contractor, you are responsible for any problems or failures during the restoration process.  The restoration and repair contract is between you, the insured, and the contractor ‑ not the insurance company and the contractor.  That is the policy reason why the Regulations require that insureds be allowed to use the contractor of your choice.


Honest, reputable contractors who are not willing to play the insurance company’s “game” are penalized ‑ they are driven out of business because they cannot compete.  Such contractors often are slandered, and are put out of business.  These contractors are not allowed to compete.  The insurance companies mislead their policyholders into believing that they must select the insurance company’s contractors.  This is not so, as demonstrated by the Regulations, above.

Insurance companies select contractors based on their low cost repair valuations ‑ typically not because of the good quality of their work.

We personally know general contractors who have been put out of business because they provide honest estimates, and more complete scopes, than the insurance company’s “preferred contractors.”

Why Should Insureds Care About What Happens To Independent General Contractors?

Insureds need to have contractors who are not held captive by insurance companies, and their cost containment priorities, to provide honest, reliable restoration and repair scopes and estimates.

If the only contractors that existed were insurance company “preferred contractors,” restoration and repair scopes and estimates would be “low ball,” missing necessary items, and undervalued.  Insureds could not get their homes repaired properly and thoroughly.

Don’t let insurance companies railroad you into using their restoration and repair contractor!  You are entitled to use the contractor of your choice.

Don’t let insurance companies put the honest, hard working contractors ‑ who are not willing to be held hostage by the insurance industry ‑ out of business!

We have to wake up now to these types of insurance company abuses!  Be aware!

It is in your, your children’s, your grandchildren’s, your parents’, your friends’, your neighbors, and everyone’s best interests to not let these abuses go unnoticed, and unaddressed.

Please visit our website at California Insurance Lawyers ( for more information.

Call us toll free at (800) 663‑1095 or at (213) 225‑5855.

We give advice free of charge ‑ we are here to help.

Gary K. Kwasniewski and Jeanette L. Viau

We’d like to hear from you!

Partners at Viau & Kwasniewski, Lawyers

Similar Posts