Work Authorization & Insurance Contingency Agreement

The parties & this contractor’s work

Sample Only — no named contractor, homeowner, property or live claim.

The contractor’s written scope identifies the agreed work, quantities, price and payment schedule.

1. Parties, authorization & limited scope

This sample illustrates an agreement between the selected trade contractor (Contractor) and the homeowner (Owner) for the property covered by their written scope.

Owner authorizes Contractor to inspect and document damage, obtain measurements, and prepare a good-faith, itemized estimate for the assigned trade work.

Physical work is authorized only after the parties identify the final written scope, price, payment schedule, required permits and applicable cancellation rights.

Only the work assigned to this Contractor is included; other contractors’ work and unrelated trades are excluded.

P1Mitigators™ prepares and transmits the paperwork as project coordinator on behalf of Contractor, subject to Contractor’s authorization.

P1Mitigators™ is not the repair contractor, a party to this Owner–Contractor agreement, a guarantor of Contractor’s work, or the recipient of payments due under this agreement.

P1Mitigators™ checks in to confirm that coordination is on track; it does not oversee construction, direct work methods or supervise Contractor’s crews.

Insurance coordination through P1Mitigators™ has zero costs to Owner; Contractor pays its separately agreed coordination fee.

Owner’s deductible, agreed repair costs and authorized noncovered work remain separate from that coordination fee.

The separate fee agreement between P1Mitigators™ and Contractor is not incorporated here and does not make Owner responsible for Contractor’s coordination fee.

2. Insurance contingency & commitment to award work

This agreement is contingent on the carrier approving and funding the assigned scope at a price accepted in writing by Contractor.

If the carrier completely denies the claim, this agreement terminates and Owner owes Contractor nothing under this agreement, including no inspection, estimating or cancellation fee.

Separately authorized emergency work, if any, must be identified in a separate agreement and is not silently added to this contingency.

In consideration of Contractor’s documented inspection, estimating and preconstruction efforts, Owner agrees to award Contractor the approved and funded physical repair work within Contractor’s assigned scope.

A partial approval does not obligate Owner to purchase denied work or unrelated trades.

Owner and Contractor must document the approved scope, price, exclusions and any authorized out-of-pocket work before construction begins.

Contractor does not interpret policy coverage, act as Owner’s public adjuster, negotiate the insurance settlement on Owner’s behalf or promise a particular carrier payment.

3. Revised scope / Contractor’s right to accept carrier pricing

If the carrier reduces or revises the assigned scope or pricing, Owner will give Contractor the revised estimate before engaging a replacement contractor for that same work.

Contractor may accept the revised scope and price in writing, subject to lawful construction requirements and a written scope amendment acknowledged by Owner.

If Contractor accepts, Owner’s commitment to award that agreed work remains in effect, subject to all cancellation rights and Contractor’s performance obligations.

This provision does not let Contractor unilaterally expand the work, collect proceeds allocated to another trade, require unlawful work, or eliminate a statutory cancellation right.

Contractor may decline an assigned scope when the Replacement Cost Payout is insufficient for Contractor to accept the work at a lawful, commercially acceptable price.

If Contractor declines that scope, Owner is free to engage another contractor for the declined work without the cancellation fee described below.

Contractor sets its own deposit and progress-payment terms, which must be accepted by Owner in writing and comply with applicable law.

Contractor is not required to start physical work until the agreed deposit terms are met and required permits and other agreed prerequisites are satisfied.

4. Direction of payment, co-payee authorization & funds

Owner authorizes and requests that the carrier include the selected Contractor as a co-payee on insurance settlement checks attributable to this Contractor’s covered repair scope, to the extent permitted by the policy, carrier procedures and mortgage lender requirements.

Owner will deliver this request to the carrier and cooperate with reasonable payment-release documentation.

This is a direction-of-payment request, not an assignment of insurance benefits, power of attorney, authority to endorse Owner’s name, or a guarantee that the carrier will name Contractor.

Owner shall not divert funds allocated to Contractor’s work while an undisputed payment for that work is due.

Contractor may collect only the agreed contract balance for its own work, after credits for deposits, prior payments and lawful offsets.

Unrelated trade proceeds, contents payments, additional living expenses and amounts exceeding Contractor’s lawful balance do not belong to Contractor.

Owner remains responsible for the policy deductible and authorized noncovered work; no deductible waiver or rebate is offered.

5. Insurance claim payout & disbursement stages

After damage documentation is collected, formatted and submitted to the carrier, these are the typical stages.

The sequence can overlap; coverage, check timing and recoverable depreciation depend on the policy and actual claim.

1. Stage 1 — Coverage applied — claim approval

   After documentation is collected, formatted and submitted, the carrier determines coverage and issues its scope and payment decision.

   Approval may be partial and does not establish that every trade or proposed supplement is covered.

2. Stage 2 — First payment — Actual Cash Value (ACV)

   The initial payment is commonly based on replacement cost less applicable depreciation and the deductible, subject to policy limits and other adjustments.

   ACV means Actual Cash Value—not Actual Cost Value.

   Payment structure varies by policy and claim.

3. Stage 3 — Contractor accepts scope and total price (RCV)

   Contractor reviews the carrier’s scope and Replacement Cost Value (RCV) before accepting the job.

   Owner and Contractor confirm the assigned work, price and payment schedule in writing before an ACV-funded deposit is released.

4. Stage 4 — Deposit and mobilization

   Contractor sets its deposit terms, and Owner must accept the amount and payment schedule in writing before physical work is authorized.

   No automatic 50% deposit, ACV deposit or “whichever is greater” amount is imposed by this agreement.

   Contractor may wait until the agreed deposit terms are met before starting work.

   The actual deposit must comply with applicable law and be credited to the contract balance.

5. Stage 5 — Supplements and written approval

   A contractor may document omitted items, hidden damage, code requirements or pricing differences and submit an itemized revised repair estimate.

   For trades such as roofing, Contractor may decline to start the affected work until the necessary scope and supplements are approved in writing and Contractor accepts the price.

   Approval is not guaranteed, and a supplement is not permission to perform extra work without the required written authorization.

   Supplements can arise before or during construction; policy deadlines and documentation requirements must be checked.

6. Stage 6 — Work completed and documented

   Contractor completes the accepted scope and supplies photographs, a work summary, applicable warranties and the completion invoice.

   The parties address the punch list and exchange appropriate conditional lien releases with final payment.

7. Stage 7 — Carrier check and mortgage-lender release

   Checks may include Owner, the mortgage lender and/or Contractor as payees.

   Owner cooperates with endorsements, the lender’s loss-draft process, inspections and contract or invoice requests.

   Owner pays amounts due under the agreed schedule when the applicable funds are released, subject to that schedule and applicable law.

   Lender procedures may affect earlier checks too; they do not always occur only at this stage.

8. Stage 8 — Recoverable Depreciation (RD) and final balance

   If the policy provides recoverable depreciation, the carrier may release withheld depreciation after receiving required proof of repair or replacement and compliance with policy deadlines.

   RD is not automatically the entire difference between RCV and the first check: deductibles, limits, nonrecoverable depreciation and actual eligible repair costs can affect the result.

   Some claims pay in one installment; others release only part initially and require completion proof for the remainder.

   Owner pays Contractor only the remaining lawful balance for Contractor’s work, with all prior payments credited.

   The parties complete the final accounting and exchange the final paid receipt and applicable releases.

6. Cancellation, default & proposed 25% liquidated damages

No fee applies to a timely exercise of any statutory cancellation or rescission right, complete denial of the claim, failure of the insurance contingency, or cancellation justified by Contractor’s material breach or other applicable law.

After all applicable statutory cancellation periods have expired, if the carrier has approved and funded the assigned work, Contractor has accepted the written scope and price and is ready, willing and legally able to perform, Owner’s refusal to permit that work or hiring another contractor for it may constitute a default.

For that preconstruction default, the proposed liquidated-damages amount is a fixed twenty-five percent (25%) of the carrier-approved Replacement Cost Value allocated solely to the unperformed scope assigned to this Contractor.

It is not 25% of the entire claim, unrelated trades, contents, living expenses or unapproved supplements, and it is not “25% or more.”

The parties must assess at execution whether probable damages are difficult to determine and whether this percentage reasonably forecasts them rather than imposing a penalty.

Relevant costs may include inspections, damage mapping, drone measurements, pricing software, estimate compilation, mobilization planning, crew scheduling, procurement administration, material commitments and demonstrable opportunities declined in reliance on this project.

Listing these costs does not establish that they were incurred or make a 25% charge automatically enforceable.

For the same preconstruction default, this is the stipulated damages remedy, not an option to choose a larger actual-damages recovery or add duplicate inspection, overhead, profit or material charges.

Any advance retained for the same default is credited against the fee; no double recovery is permitted.

After physical work begins, payment for authorized work actually performed and any termination accounting must be addressed under the final construction contract and applicable law, not automatically by this preconstruction fee.

Any written demand must identify the default, approved scope, calculation and credits and allow fifteen (15) days for payment or a written dispute.

Reasonable attorney’s fees and court costs may be recovered only to the extent permitted by an enforceable contract and applicable law; any statutory reciprocity and judicial review remain applicable.

A cancellation fee is not automatically a construction lien, and this clause does not waive defenses or consumer remedies.

7. Cancellation rights override fee and payment clauses

Where Florida home-solicitation law applies, Owner may cancel without penalty until midnight of the third business day after signing under § 501.025.

Written notice may be delivered in person or mailed to the seller’s address stated in the executed agreement; mailed notice is effective upon postmarking, and no special form is required if it expresses the intent to cancel.

The completed agreement must include the applicable written notice and cancellation forms required for that transaction, including federal requirements where applicable.

Section 520.72 provides a separate three-business-day cancellation right for transactions within its home-improvement sales and finance coverage; it is not assumed to govern every non-emergency repair contract.

For qualifying residential roofing contracts, § 489.147(6) provides cancellation without penalty within 10 days after execution or by the statutory official start date, whichever comes first, when entered into within 180 days of events covered by the Governor’s emergency declaration and the property is in the declared area.

Under that roofing provision, notice must be sent by certified mail, return receipt requested, or another form of mailing providing proof, to the contract address.

The statutory official start date can be triggered by permit issuance or a qualifying temporary roof repair, not only the arrival of a permanent roofing crew.

The roofing-specific rule applies only to qualifying roofing contracts, not automatically to fencing, painting, drywall or other non-roofing trades.

No clause here shortens a longer applicable cancellation period or waives a statutory right.

8. Completion, lien releases & final accounting

Contractor will provide completion photographs, a work summary, applicable warranties and an accurate final invoice reflecting payments and credits.

A completion invoice is not represented as a paid-in-full receipt until payment has actually cleared.

Owner may request appropriate conditional progress or final lien releases in exchange for the corresponding payment and unconditional releases after cleared funds.

Required contractor affidavits and releases from other potential lienors must be handled under Florida construction-lien law where applicable; Contractor’s release alone does not necessarily discharge every supplier or subcontractor claim.

A final accounting will identify the agreed price, approved supplements, deductible, payments, credits and remaining balance.

Owner is not required to pay more than the agreed lawful contract balance merely because insurance proceeds are greater.