Choosing Contractors After an Appraisal Award

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An appraisal award answers one question: how much is the covered loss worth. It does not answer a second question that follows immediately behind it, which is who will actually perform the repair work. Those two questions are handled by entirely different people. The appraisal panel, made up of the policyholder’s appraiser, the insurer’s appraiser, and, if needed, an umpire, has no role in selecting, recommending, or approving a contractor. Once the award is signed, the policyholder is generally free to hire whoever they choose, subject to whatever the policy itself requires regarding licensed and qualified work. Some policyholders choose to hire the same contractor who provided the estimate used during the appraisal, while others solicit new bids once the value of the loss is finally settled, and either approach is compatible with how the award itself functions.

That freedom comes with practical considerations that have nothing to do with the appraisal process itself. A roofing contractor working in Minnesota, for instance, should carry the license and registration required by the state and by the local municipality, along with general liability insurance and workers compensation coverage for employees on the roof. Verifying that coverage directly with the insurance carrier listed on a certificate, rather than simply accepting a photocopy, is a reasonable step for any property owner about to have significant work performed. Local building departments can also confirm whether a permit will be required for the scope of repair, which for a full roof replacement is nearly always the case. Many Minnesota municipalities also require a final inspection once the work is complete, and skipping that step can create complications later if the property is sold before the paperwork is closed out.

References and completed work carry real weight. A contractor willing to provide addresses of recently completed jobs of similar scope, ideally within the same region and climate, allows a homeowner to see finished work rather than relying on promotional photographs alone. Manufacturer certifications matter too, particularly for roofing systems where an extended or enhanced warranty depends on the installer holding a specific credential from that shingle or membrane manufacturer, something worth asking about directly since warranty terms differ significantly between a standard limited warranty and an enhanced one tied to certified installation.

The appraisal award itself typically breaks the loss into components, often replacement cost value and actual cash value, with the difference held as recoverable depreciation until repairs are completed and documented. A contractor’s final invoice needs to match the scope that was actually approved and paid for, since discrepancies between the awarded scope and the completed work can create complications when a policyholder later submits proof of completion to recover withheld depreciation. Contractors experienced with insurance-related repairs are generally familiar with this documentation requirement, but it is worth confirming before work begins rather than after.

Price alone is rarely the most useful way to compare bids once an award has already established the value of the loss. Because the appraisal has already set a dollar figure for the scope of repair, a homeowner selecting among bidders is often better served comparing workmanship, materials, warranty terms, and scheduling than comparing price alone, since the underlying budget has already been determined through the appraisal process itself. A homeowner who receives a bid noticeably below the awarded amount might reasonably ask what scope or materials were reduced to reach that price, just as one who receives a bid noticeably above it might ask what additional work the higher figure includes, since either gap usually has a specific, identifiable explanation.

General education only: the appraisal process described here can vary by state and policy language, and nothing in this article is legal advice.

Russ Lis is a working property insurance appraiser and umpire based in Minnesota, serving clients nationwide. Contact Appraisal Resolution.