Where the three-bid “rule” actually comes from
Adjusters request multiple bids because more bids mean more downward pressure on the estimate. The adjuster isn’t doing anything wrong by asking. They’re doing what the system incentivizes them to do. But the process is designed to benefit the carrier’s cost position, not to protect the quality of your restoration.
The phrase you’ll hear is, “My adjuster said I had to get three bids.” That framing makes it sound like a requirement. It’s a suggestion. And once you understand who it benefits, you can decide whether to follow it.
Your rights as a property owner
- You can choose your own contractor.
- You do not have to use the carrier’s preferred vendor.
- Your policy typically pays based on covered scope, not contractor selection.
How the bidding process rewards the wrong behavior
The lowball-and-change-order cycle
When three contractors know they’re competing on price alone, the incentive is to come in low and recover margin later. The mindset is simple: once a contract is signed, the contractor’s foot is in the door. They can’t be removed. And that’s when change orders can start.
A contractor submits a bid that looks attractive on paper. The insurance company approves it because the number is lower. Work starts. Then the contractor discovers scope that wasn’t included. A change order goes to the adjuster. The adjuster pushes back. Work stalls while the two sides negotiate. Meanwhile, your building sits half-finished.
The final cost after change orders often matches or exceeds the higher bid you passed on. But now you have a contractor who missed things on the front end and a project timeline that’s blown.
What gets missed in a rush to bid low
Low bids often reflect missing scope rather than better pricing. Common omissions include permit fees, code-required upgrades, containment requirements, and documentation needed to support the claim. Those missing items frequently reappear later as change orders, creating delays and cost disputes that could have been avoided during estimating.
The hidden cost your adjuster isn’t calculating
The bid comparison your adjuster runs is based on contractor pricing. It doesn’t account for the cost of the time it takes to collect those bids.
For a commercial property, every week the building sits damaged is a week of lost revenue. Units go offline, tenants can’t occupy their space, and lease renewals stall. For multifamily properties, a commercial water damage restoration project that stretches an extra month could mean tens of thousands of dollars in vacancy loss that never appears in the bid comparison.
This is where the period of restoration matters. Period of restoration is the insurance term for the window of time during which business interruption (BI) coverage compensates you for lost income. That window is based on how long the repair should take with “reasonable speed.”
Delays caused by your own bid collection process typically don’t extend the period of restoration. The insurance company’s BI payout runs on a clock that started when the damage happened, not when you finally selected a contractor. The weeks you spent gathering bids, waiting for adjuster reviews, and resubmitting revised estimates may represent lost revenue that your BI policy won’t cover.
What happened when one property owner brought in multiple bids
A property owner in Savannah had an insurance restoration claim on a mid-size commercial building. I put together a detailed scope — every line item accounted for, from containment and code compliance to moisture documentation and permits. The estimate reflected what the project would actually cost to do correctly.
A competing contractor came in lower. I spent days leveling the two bids line by line. The competitor hadn’t scoped containment, hadn’t researched code upgrades, and had skipped documentation steps entirely. Once I laid out the gaps, they revised their bid up by $40,000. It still came in lower because the scope still wasn’t fully covered.
The property owner wanted to go with us. He had no interest in the other company. But the other bids were already on the table, and the insurance company pointed to the lower number. He was stuck. That’s what collecting multiple bids actually does. It doesn’t help the property owner make a better decision. It gives the insurance company a reason to pay less.
What to do instead of collecting three bids
You don’t have to play the three-bid game. Here’s the process that protects your interests:
- Select a contractor based on qualifications. Look for experience in insurance restoration specifically, not just general contracting. Ask about their supervision model, change order history, and references from similar commercial projects. Not sure what to ask? Here’s a guide to interviewing an insurance restoration contractor.
- Tell your insurance company this is your preferred vendor. You have the right to choose your own contractor. Inform your adjuster that you’ve selected a qualified firm and that you’d like them to work together on scope and pricing.
- Work together on scope and pricing. Your contractor and adjuster should review the damage jointly, agree on scope, and negotiate the estimate collaboratively. This eliminates the adversarial dynamic that the three-bid process creates.
When getting multiple bids does make sense
There are situations where obtaining multiple bids can be useful. If the loss is small, the scope is straightforward, or you’re comparing contractors with similar insurance restoration experience, multiple estimates may help validate pricing.
The problem isn’t getting multiple opinions. The problem is treating the lowest number as the best decision on a complex commercial loss where scope accuracy, timeline, and supervision matter more than price.
Take control of your next insurance restoration project
If you’re evaluating restoration contractors after a commercial loss, focus on scope accuracy, supervision, documentation quality, and insurance experience before comparing price alone. That sequence protects your property, your timeline, and your tenants better than any three-bid process.
If you want to talk through how this works on a specific project, our team is available.
