After your property is damaged — whether from a windstorm, hail, fire, or water — the pressure to get it fixed quickly is real. Contractors know this, and not all of them operate honestly. Choosing the wrong one can mean subpar repairs, out-of-pocket costs your insurer won't cover, legal problems from an assignment of benefits you didn't fully understand, or simply work that fails inspection.
This guide walks you through every step of selecting a qualified contractor for insurance repair work: what credentials to verify, what red flags to recognize before you're committed, which questions will reveal how a contractor actually operates, and how to read a contract before you sign it.
If you've already filed your claim, you may also find our guide on how to file a property damage insurance claim useful for understanding where contractor selection fits in the overall process.
1. What Credentials to Check
Before you spend any time talking scope or price with a contractor, confirm they have the credentials the job requires. This takes less than ten minutes and filters out a significant portion of bad actors.
Contractor's License
Licensing rules for roofing, general contracting, electrical, plumbing, HVAC and other trades differ from state to state, and in some places they are set by the city or county. Ask the contractor which license applies to your job, then check the rules where you live.
How to verify: If your state licenses the trade, search your state's contractor licensing board website by the contractor's full legal business name or their license number. If it does not, ask your city or county building department what applies. Whichever office issues the license, its record should show the license is active (not expired, suspended, or revoked), the license type matches the work you need, and the business entity name matches what's on the contractor's estimate or business card.
If a contractor tells you they're "exempt" from licensing, verify that claim independently with the office that would issue the license (your state's contractor licensing board, or your city or county building department) before taking them at their word.
General Liability Insurance
General liability insurance covers damage the contractor causes to your property while working. Without it, if a crew member drops a ladder through your skylight or causes a water leak that ruins your flooring, you may be left trying to recover the cost from the contractor yourself.
Ask what coverage limits the contractor carries, and for large or complex projects ask for higher limits. Request a Certificate of Insurance (COI) — not just a verbal assurance — and see Section 2 for how to verify it.
Workers' Compensation Insurance
Workers' compensation covers the contractor's employees if they're injured on the job. The rules on who must carry it differ by state, so ask the contractor for proof of coverage, and ask your state's workers' compensation agency if you are unsure whether the requirement applies to this contractor.
The COI should show a separate workers' compensation policy, not just general liability. A contractor who says they do not need workers' compensation (for example, a sole proprietor with no employees) should be able to show you why. Ask your state's workers' compensation agency how to check that where you live.
Business Registration
If the contractor is an LLC or a corporation, look it up in your state's business registry (in many states the secretary of state runs it) and confirm it is active. A sole proprietor may not appear there; ask what name the business is licensed under and check that it matches the license, the estimate and the contract.
- License number confirmed active with the office that issues it
- Certificate of Insurance in hand (general liability + workers' comp)
- Business name matches the license, and the business registry if the contractor is an LLC or corporation
- Physical business address (not a PO Box or personal address)
2. Verifying Insurance and Licensing
Credentials can be faked. A Certificate of Insurance can be forged or based on a cancelled policy. This section covers how to verify that what a contractor hands you is actually real.
How to Verify a License
Go directly to the website of the office that issues the license (your state's contractor licensing board, or your city or county building department) — don't rely on a search engine result that might lead you to a third-party aggregator. Look up the contractor by license number (most accurate) or business name. Confirm:
- Status shows "active" or "current" — not expired, suspended, or revoked
- The license type matches the trade (roofing license for roofing work, general contractor license if managing multiple trades)
- The name on the license matches the name on the estimate and contract
- The license covers your county or municipality (some licenses are local, not statewide)
How to Verify a Certificate of Insurance
Request a Certificate of Insurance (COI) made out to you as the certificate holder — not a generic "to whom it may concern" version. The COI lists the insurer, policy numbers, coverage amounts, and expiration dates.
Once you have the COI:
Call the insurer directly
Call the insurance company listed on the COI — using the number from the insurer's official website, not the number printed on the document — and ask them to confirm the policy is active and in good standing for the contractor's business name. This takes about five minutes and is the only way to verify the COI hasn't been fabricated or issued on a policy that was subsequently cancelled.
Check the policy expiration dates
The policy must be active on the day work begins and throughout the project. If a policy expires mid-project, request a renewal COI before work continues.
Confirm coverage limits
General liability should show the coverage limit per occurrence. Workers' compensation should show a policy number (not "not applicable" unless you've independently confirmed the contractor is a sole proprietor exempt under your state's law).
3. Red Flags to Watch For
Unscrupulous contractors operate year-round and target all types of insurance repairs — not just storm damage. Here are the most common warning signs.
- Asks you to sign an Assignment of Benefits (AOB) — this hands them rights under your insurance policy (see below)
- Offers to waive or absorb your deductible — in Texas, for example, it is illegal for a contractor or roofer to offer to waive a deductible (Texas Department of Insurance); ask your insurer or your state's department of insurance how your state treats this
- Demands a large upfront cash payment before any work begins
- Pressures you to sign immediately or claims the offer expires today
- Cannot provide a physical business address (PO Boxes don't count)
- Refuses to pull required permits or tells you permits aren't necessary
- Quotes by the job only, with no itemized breakdown of labor and materials
Assignment of Benefits
AOB arrangements are worth understanding in detail because they are presented by some contractors as a convenience — "so you don't have to deal with the insurer." In practice, signing an AOB hands the contractor rights under your insurance policy. If you are handed one, do not sign it on the spot: read it closely and ask the contractor exactly what it lets them do.
Whether an AOB is allowed depends on your state and your policy. For example, Florida law says a policyholder may not assign post-loss benefits under a residential property insurance policy issued on or after January 1, 2023, with limited exceptions, and that an attempt to do so is void (Florida Statutes section 627.7152(13)). Wherever you live, consult with your insurer and possibly an attorney before signing any AOB.
Deductible Waivers
Your deductible is the part of a covered loss that your policy leaves you to pay. The Texas Department of Insurance calls an offer to waive or absorb it a selling point that bad contractors often use: "The contractor then cuts corners, uses lower quality products, or inflates the bill sent to the insurance company to cover the difference." In Texas it is illegal for a contractor or roofer to offer to waive a deductible (Texas Department of Insurance). Ask your insurer or your state's department of insurance how your state treats a waived deductible.
Permit Avoidance
Ask whether the job needs a permit and who pulls it; your city or county building department can tell you. Permits mean the work is inspected to code. A contractor who won't pull a permit the job needs may be unlicensed, cutting scope on the work, or avoiding an inspection. Unpermitted work can complicate future sales of your home.
4. Questions to Ask Before You Hire
A well-qualified contractor will answer these questions readily and specifically. Evasiveness or impatience with credential questions is itself meaningful information.
"Can I have your license number and the name of your insurer?"
This is the first filter. Any legitimate contractor will hand these over without hesitation. A contractor who hedges, provides a license number for a different jurisdiction, or says they're "in the process of renewing" is telling you something important.
"Who will actually be doing the work — your employees or subcontractors?"
Many general contractors use subcontractors, which is normal. But if the job is subcontracted, confirm that the subcontractors are also licensed and insured. Ask for their license and COI as well, or ask the GC to confirm in writing that all subs are covered under the GC's policy.
"Have you done similar work in this area recently? Can you provide local references?"
Ask for three local references from comparable jobs — similar scope, similar construction type — completed within the last 12 months. Call the references. Ask them: Did the project finish on schedule? Did final costs match the estimate? Were there any inspection issues? Would you hire them again?
"Who pulls the permits, and will I receive copies of the inspection sign-offs?"
The contractor should pull the permits — not you. And you should receive paper or digital copies of all passed inspections before making final payment. This protects you if issues arise later.
"What is your payment schedule, and do you require a deposit?"
Ask for the deposit amount and the payment schedule in writing in the contract, with progress payments tied to completion milestones, and a final payment held until work is complete and passes inspection. Be wary of contractors who demand a large share of the price upfront, or who want full payment before work begins.
"What warranty do you provide on your workmanship, and do materials carry a manufacturer's warranty?"
Workmanship warranty lengths differ by contractor and trade. Get the warranty terms in writing in the contract — not just in the sales conversation. Understand the difference between the contractor's workmanship warranty and the manufacturer's material warranty, and confirm both are transferable if you sell the property.
"Have you worked on insurance repair jobs before, and are you familiar with my insurer's scope-of-loss format?"
Experience with insurance repair work specifically matters. Contractors who routinely work with insurance claims understand how to document scope, communicate with adjusters, and handle supplement requests if hidden damage is found once work begins. A contractor unfamiliar with insurance work can create billing mismatches that delay your claim or leave scope gaps you'll pay out of pocket.
5. Getting and Comparing Quotes
Never accept a single quote for insurance repair work. Multiple bids give you pricing context, reveal scope discrepancies, and document that you exercised reasonable care in the selection process — which can matter if your insurer questions costs later.
Get At Least Three Written Estimates
All estimates should be in writing and should itemize: materials (type, grade, quantity), labor, disposal/haul-away, permit costs, and any subcontracted scope. A one-line estimate ("Roof replacement — $12,000") is not sufficient for insurance repair work. You need enough detail to compare bids against each other and against your adjuster's scope of loss.
Compare Against Your Adjuster's Estimate
Your insurance adjuster wrote a scope of loss — an itemized list of what they've determined needs repair and what they're willing to pay. Before hiring a contractor, review that document line by line against the contractor bids. Look for:
- Scope gaps: Items the adjuster included that no contractor bid covers — these are items you may need to pay out of pocket, or supplement with your insurer
- Pricing discrepancies: Contractors quoting significantly more than the adjuster's line items — these may need to be supplemented or negotiated before the contractor begins work
- Upgrade costs: Code upgrades or material substitutions not covered in the original scope — confirm who pays for these before work starts
Our guide on filing a property damage insurance claim walks through the adjuster estimate process in detail, including how to handle scope disputes before hiring a contractor.
Otter Quotes and Competitive Bids
Otter Quotes is built around the principle that homeowners shouldn't have to track down multiple contractors one by one after a loss. You describe your project, and contractors submit bids you can compare side by side. This gives you the multiple written estimates you need without the phone tag and scheduling delays of sourcing quotes individually. See how it works for the full process.
6. Reviewing the Contract Before You Sign
A contractor's proposal is not a contract until it's a signed, written agreement with specific terms. Here's what every insurance repair contract should contain — and what to refuse to sign.
What the Contract Must Include
- Full legal name and license number of the contracting entity
- Physical business address and contact information
- Detailed scope of work — materials, grade, quantity, and labor tasks, not vague summaries
- Estimated start date and substantial completion date, with provisions for delay
- Payment schedule tied to project milestones, not arbitrary dates
- Who is responsible for pulling permits
- Workmanship warranty terms in writing
- Dispute resolution process (arbitration clause terms, if any)
- Change order procedure — any scope changes must be in writing before work proceeds
What to Refuse to Sign
- Assigns your insurance benefits to the contractor (Assignment of Benefits / AOB)
- Authorizes the contractor to negotiate your claim directly with your insurer without your involvement
- Waives your right to dispute the final invoice
- Includes a clause where you accept that permits "are not required" for the described scope — verify this independently
- Has blank spaces in any material term — price, scope, dates
Change Orders
Hidden damage discovered once work begins is common in insurance repair jobs — water damage behind walls, rotten decking under shingles, deteriorated framing behind stucco. Legitimate contractors document discovered damage with photographs, provide a written change order describing the additional scope and cost, and wait for your signature before proceeding. Never allow a contractor to proceed with additional work based on a verbal agreement alone.
If discovered damage may be covered by your insurance, contact your insurer before authorizing the change order. Your adjuster can inspect the additional damage and issue a supplement if warranted.
7. How Otter Quotes Helps You Choose
Otter Quotes is a bid platform designed specifically for homeowners navigating property damage and insurance repair projects. The process is straightforward: you describe your project and upload your adjuster's estimate, and we put it in front of contractors who serve your area to submit competitive written bids.
This solves the most common friction points in contractor selection:
- Multiple written bids, fast: Instead of calling contractors one by one and waiting for callbacks, you get competitive bids in one place without the scheduling overhead
- Adjuster estimate alignment: You can share your adjuster's scope with bidding contractors directly, so bids come back against the same scope — making comparisons meaningful
- Written, itemized proposals: The platform is built around written bids, not verbal estimates — giving you the documentation you need for both contractor selection and your insurer
Otter Quotes does not make the hiring decision for you — that remains yours. But it gives you the competitive bids and documentation to make that decision on solid footing. Learn more at how it works. If you have questions about a specific bid or want to understand your adjuster's estimate, our FAQ covers common questions in detail.
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Describe your project and receive written bids from contractors who serve your area and choose to bid — no pressure, no commitment until you choose.
Get Bids on Your ProjectFrequently Asked Questions
How do I verify a contractor's license?
If your state licenses the trade, its contractor licensing board website is the place to look. Search by business name or license number; if there is no state license, ask your city or county building department what applies. The license should be active, match the trade you need, and list the correct business entity. Don't rely on the contractor to provide a screenshot — look it up yourself on the issuing office's official website.
What insurance should a contractor carry?
At minimum, look for general liability insurance and workers' compensation. Request a Certificate of Insurance (COI) and call the insurance company directly to confirm the policy is active and hasn't been cancelled. The phone number should come from the insurer's official website, not the COI itself.
What is an Assignment of Benefits (AOB) and should I sign one?
An Assignment of Benefits (AOB) is a document that hands the contractor rights under your insurance policy. Whether an AOB is allowed, and what it lets the contractor do, depends on your state and your policy. Do not sign one on the spot: read it closely, ask the contractor exactly what it lets them do, and consult your insurer and, if needed, an attorney first.
How many quotes should I get for an insurance repair?
Get at least three written, itemized quotes. Multiple bids help you understand fair market pricing, identify unusually low bids (a frequent red flag), and give you leverage to negotiate scope gaps with your insurer. All bids should itemize materials, labor, and permit costs — not just a total job price.
Can my insurer tell me which contractor to use?
That depends on your policy and your state. Your insurer may have a preferred contractor network. Check your policy documents for any provisions about choosing a contractor, and ask your state's department of insurance if you are unsure of your options. If you choose your own contractor, ensure their bid aligns with your adjuster's scope before work begins to avoid payment disputes.
What are warning signs of a dishonest contractor?
Key red flags include: pressure to sign immediately, requests for large upfront cash payments, no physical business address, inability to provide verifiable credentials, asking you to sign an AOB, promising to waive or absorb your deductible, quoting a total price with no itemized breakdown, and unwillingness to pull permits. Any single one of these warrants caution; multiple red flags together should cause you to walk away.
What should I do if a contractor finds additional damage during the repair?
Ask the contractor to stop work, document the discovered damage with photographs, and contact your insurer before authorizing any additional scope. Your adjuster can inspect the supplemental damage and issue additional coverage if it's covered under your policy. Never authorize additional work based on a verbal agreement — require a written change order with documented scope and pricing before work resumes.