Direct Repair by Insurer’s Builder or Direct Settlement and arrange my own Trades to repair?

Taking, or asking for, a cash settlement for your insurance claim may be tempting, especially in busy times when trade availability is scarce, but is this the best decision for you and your Home?  There are some important points to consider, before making the decision to take a settlement:

  1. Did you know that some insurers give a lifetime warranty on materials and workmanship for repairs carried out by their Panel Repairers. This does not apply when you use your own builder.
  2. Do you have the knowledge, time, and energy to organise and Co-ordinate your own repairs? For example:

    • What will you do/who will you turn to if things go wrong? Once you accept a settlement, your Insurer has no responsibility or obligation to assist any further- basically you are on your own! – This could range from poor workmanship, sub-standard/ incorrect materials, damage to your home or contents etc.- Are you confident that if any of this occurs, you can resolve this yourself?
    • Do you understand the Scope of Works and how this will be completed? Are you confident that you will be able to identify any issues during the repair and negotiate/arrange the rectification of these direct with your trade? How will you supervise the work to ensure that you are “getting what you paid for?”
    • How will you manage Warranty issues that may arise down the track? For example-What will you do if you paid a trade for repairs, and they fail 3 years later? You call the trade, and they are no longer in business or refuse to deal with you? How will you manage this dispute?

  3. Have you given any thought on how you will find quality trades. Do you know trades? What if they don’t do what they say they will or don’t deliver what you expected?
  4. Will these trades or builder be ready start when they say they will start; will they see the job through in a timely manner, and if they don’t, what will you do about it with no support from your Insurer?
  5. If additional unseen damage is unveiled during the repairs, who will pay for this additional work? Insurance panel builders can go back to your insurance company if the scope is to be revised. When a cash settlement is opted for, then going back for additional works can be difficult.

Direct Settlement, or “Cash Settlement” as it is often referred to (although it is never actual “Cash” is in most cases, NOT the best option to resolve your Insurance claim. However, there is the occasional scenario where it is best suited, or the only option, for example: Your resultant damage repairs cannot be warranted due to pre-existing issues at your property, or you may be planning to take the opportunity to upgrade the affected area which might entail major design changes and additional cost, etc.

Be sure to think your decision through very carefully, or reach out to your Insurer to discuss, before potentially making a poor decision. Direct Repair via your Insurer, if available, is generally the best option for you and your home, as it comes backed with the Support of your Insurer, proven, quality Trades, and in some Insurer’s, a lifetime warranty on Repairs.