Restoration Insurance Billing 101

Direct insurance billing is the difference between a restoration job that costs you a $1,500 deductible and one that costs you $8,000 upfront with reimbursement to chase. Understanding how the billing works helps you ask the right questions before signing.

How direct billing works

You assign benefits to the restoration company (an AOB — Assignment of Benefits — form). The contractor invoices the insurance carrier directly. The carrier pays the contractor. You pay your deductible. This is the standard model for water mitigation in California.

California's AOB rules

California regulates AOB forms tightly compared to some other states. The form must include specific disclosures, you have a right to cancel within a defined window, and the contractor can't sue your carrier directly under most AOB structures. These protections exist because of past contractor AOB abuse in other markets.

What's covered vs. what's billed

Mitigation (water extraction, drying, antimicrobial, documentation) is almost always covered for sudden-and-accidental events. Rebuild work (drywall replacement, paint, flooring) is also covered but billed separately, often by a different contractor. Some California restoration companies are full-service (mitigation + rebuild); many specialize in mitigation only.

The deductible reality

Most California homeowners policies have $500 to $2,500 deductibles. On a $5,000 mitigation invoice with direct billing, your out-of-pocket is your deductible. a SoCal restoration dispatch service and most professional restoration companies confirm this on the initial call.

Red flags

Contractors who demand full payment upfront. Contractors who claim no deductible is required. Contractors who pressure you to sign AOB documents before any work has started. The California Department of Insurance publishes consumer guides for spotting contractor fraud in disaster scenarios.