Step 1
You always pay your deductible
This is your out-of-pocket responsibility before insurance pays. It goes to your contractor, not the insurance company. Never work with a contractor who offers to "waive" it — that's illegal in FL.
Restoration Billing
How Restoration Billing Works: Deductibles, Payments, and What You Owe
Understanding how money flows during an insurance claim — deductibles, direct billing, depreciation holdback, and supplement payments — prevents confusion and ensures you receive everything your policy covers.
- Deductibles
- ACV vs RCV
- Direct Billing
- Depreciation
Key Steps
What you need to know
Step 2
Understand ACV vs RCV payment stages
With Replacement Cost Value (RCV), you get Actual Cash Value (ACV = replacement cost minus depreciation) first. The remaining depreciation is released after repairs are completed and receipts submitted.
Step 3
"Direct billing" means the contractor handles insurance paperwork
You authorize the contractor to communicate with insurance on billing. But you remain the policyholder — if insurance underpays, you're still responsible for the difference.
Step 4
The first check may seem low — that's often normal
If you have an RCV policy, the first check reflects ACV (depreciated amount). The rest comes after work is done. Check if depreciation is being held before assuming you're being lowballed.
Key Takeaways
Your deductible is always your responsibility — no legitimate contractor waives it
RCV policies pay in stages: ACV first, then depreciation after repairs are completed
"Direct billing" means the contractor handles insurance paperwork, but you're still the contract holder
Always submit completion documentation to recover your depreciation holdback
Supplements are normal and adjust the claim for hidden damage found during work
FL's AOB ban means you stay in control of your claim and payment authorization
Visual Reference
Insurance and restoration in practice
Real-world examples of the documentation, coordination, and processes involved in insurance claims.
Understanding the Numbers
Comparing the insurance check to the contractor's estimate — and understanding depreciation holdback — prevents confusion.
Xactimate Line Items
Every line item in the Xactimate estimate corresponds to a specific repair task and cost. Review them carefully.
Step-by-Step
How the process works
Understanding each step gives you leverage and helps prevent common problems.
1
Understand your deductible
Check your policy for standard and any special deductibles (hurricane, wind/hail). This is what you pay out of pocket.
2
Review the initial payment
Insurance issues ACV check first (if RCV policy). Compare to the estimate. Understand what depreciation is being held back.
3
Complete repairs and submit documentation
Your contractor provides completion certificates and invoices. Submit to insurer to trigger depreciation release.
4
Recover depreciation and close the claim
Insurer releases held depreciation. Review final numbers. Ensure all supplements were paid. Sign off on the completed claim.
State-specific notes
South Florida
FL's AOB ban means you sign a "direction to pay" rather than assigning your claim. You retain responsibility and control. Hurricane deductibles add complexity.
Charlotte / NC
NC billing processes are generally straightforward. Standard deductibles, standard RCV/ACV structures. Less regulatory complexity than FL.
Coastal SC
Wind pool claims may have different payment structures. Verify whether your wind claim goes through the SC Wind Pool or your standard homeowners carrier.
Continue Reading
Related insurance guides
Need help understanding your claim payments?
We explain deductibles, depreciation, and direct billing. Call for clarity on your restoration invoice or insurance check.