A. Will the insurance company pay for repairs the insured did?

After you report a property insurance claim, you realize some of the damages doesn’t require you to hire a professional.  In fact, you’re pretty good with changing light bulbs and your family sees you as a handyman.  So you decide you’ll let the roofers change your roof but you can do your part by painting, replacing drywall, and repairing your floor with some extra tiles in the garage.

So question is, are you going to get paid for it?  If yes, will it cover both the materials AND labor?  After all, that’s what the insurance company WOULD HAVE paid had you not done any repairs.

While the answer may vary depending on where you live, there is a good chance you would be compensated if you were in Florida.

B. Getting paid “Actual Cash Value”:

Florida law is clear that an insured is entitled to actual cash value of the covered loss for both labor and materials, even if the insured performed these repairs.

In Florida, the 3rd DCA answered the question on when an insured is entitled to payment for benefits.  See Citizens Prop. Ins. Corp. v. Tio, No. 3D18-2440 (Fla. 3d DCA 2020).  The court paid special attention to a Florida Statute, Section 627.7011(3) which provides:

(3) In the event of a loss for which a dwelling or personal property is insured on the basis of replacement costs:

(a) For a dwelling, the insurer must initially pay at least the actual cash value of the insured loss, less than applicable deductible.  The insurer shall pay any remaining amounts necessary to perform such repairs as work is performed and expenses are incurred.

Note – Florida law does not distinguish between labor and materials, so entitlement applies to both.  As per statute, an insurer is required to issue payment for the actual cash value of the insured, regardless of the work performed.

What is “Actual Cash Value”?

According to the Florida Supreme Court, actual cash value is “replacement cost minus depreciation.”  Trinidad v. Florida Peninsula Ins. Co., 121 So.3d 433 (Fla. 2013).  Depreciation is money held back by the insurer (generally 10-20%) from its estimate, and paid back to the insured only after the insured shows proof of repairs to the insurer.

However, labor is not depreciated in calculating actual cash value (because unlike materials, the labor does not become obsolete over time).  As a result, the insured is always entitled to labor costs (whether he performs it or not) at market rate.