← Opening letters

Out-of-Pocket Recovery Agreement

Send toInsured
WhenYour insured wants you to go after costs beyond the deductible

💡 When to use it

Send this agreement after the insured tells you they have out-of-pocket costs beyond their deductible and wants your office to pursue them. Your office cannot pursue those costs until the insured signs it.

  • Be upfront about the fee. State the percentage clearly, and that it only applies if money is recovered.
  • Say plainly that recovery isn't guaranteed. Subrogation is an attempt to recover, not a promise. Insureds who hear this up front are far less likely to be upset later.
  • Make the insured fill in the amounts. The amount claimed must be what they can prove, with documents attached. Your office should never guess or estimate for them.
  • Include the personal property form for contents losses, like furniture, electronics, and clothing. Fire losses usually destroy receipts, so the form tells them where else to look.
  • Have your office's legal counsel approve the final wording before you use it. This is a contract, and fee agreements can be regulated differently from state to state.

✉️ The letter

Fill in the boxes and the letter updates as you type. Anything you leave blank stays [in brackets]. What you type stays on your device. Free downloads and prints include a light Subrobuddy watermark.

[Insured's Name]
[Street Address]
[City, State ZIP]

[Today's Date]

RE: Out-of-Pocket Recovery Agreement

Insurance Carrier: [Client Name]
Claim No.: [Client Claim Number]
Our File No.: [Your Company File Number]		Date of Loss: [Date of Loss]
Loss Location: [Loss Address]

Dear [Insured's Name]:

Who we are: [Your Company Name] is a subrogation recovery company working on behalf of [Client Name], your insurance carrier. [Client Name] has asked our office to pursue recovery from the party responsible for your loss on [Date of Loss]. You can confirm this by contacting your [Client Name] claim representative, [Adjuster Name], at [Adjuster Phone].

Thank you for letting us know about your out-of-pocket costs from this loss. This agreement explains how our office can pursue those costs for you. Please read it carefully, fill in your costs, sign it, and return it with your supporting documents.

What this agreement does

By signing below, you authorize [Your Company Name] to pursue your out-of-pocket costs listed in this agreement from the party responsible for this loss, on your behalf, along with [Client Name]'s subrogation claim. In the event your insurance carrier does make a payment on your damages, our office will automatically include your deductible of $[Insured's Deductible] in our recovery efforts. Your deductible is not part of this agreement.

Our fee

If our office recovers money for your out-of-pocket costs, you agree that [Your Company Name] will keep a subrogation fee of [____]% of the amount recovered for those costs. The rest will be paid to you. If nothing is recovered, you owe nothing.

Please understand: recovery is not guaranteed

Subrogation is an effort to recover money from the party responsible for the loss. It does not mean a recovery will happen. The responsible party may deny the claim, may not have insurance, or may not be able to pay. If a recovery is made, our office will keep the fee described above. We will contact you before accepting any settlement of your costs for less than the amount you claimed.

Your out-of-pocket costs

Please fill in only the costs you paid yourself that your insurance did not cover. Each amount must be based on what you can prove, and you must attach proof for every line. Costs without proof may not be recoverable.

Category Description Amount paid Proof attached?
Excluded property (landscaping, trees, fences, etc.) $ Yes / No
Repairs or services not covered $ Yes / No
Hotel, rental, or temporary housing not covered $ Yes / No
Meals and groceries beyond your normal costs $ Yes / No
Everyday items you had to buy again (toiletries, clothing, household goods) $ Yes / No
Extra travel (mileage, gas, parking) $ Yes / No
Lost time from work $ Yes / No
Personal property not covered (see Attachment A) $ Yes / No
Other $ Yes / No
Total claimed $

What to attach

  1. Receipts, invoices, and proof of payment (bank or credit card statements are fine)
  2. Itemized estimates or invoices from your repair companies, such as landscapers, mitigation companies, contents repair companies, and contractors, that break down the repair work, materials and their cost, time and labor rates, and the total
  3. Photos and video of the damage and the scene
  4. The completed personal property form (Attachment A), if you are claiming personal property
  5. For lost time from work: a letter or pay stub from your employer showing your pay rate and the hours or days missed

Signatures

By signing, I confirm that the costs listed above are true and accurate to the best of my knowledge, and I agree to the terms of this agreement.

Insured signature: ______________________________ Date: ____________
Printed name: ______________________________

Co-insured signature (if any): ______________________________ Date: ____________
Printed name: ______________________________

For [Your Company Name]: ______________________________ Date: ____________
Printed name and title: ______________________________

Please return the signed agreement and all attachments to [Your Company Address] or [Email] by [Return Date]. If you have questions, please contact our office at [Phone].

Sincerely,

[Name]
[Title]
[Company]
[Address]
[Phone] · [Email]

Attachment A: Personal property inventory

Insured: [Insured's Name] · Claim No.: [Client Claim Number] · Date of Loss: [Date of Loss]

Please list each item of personal property that was damaged or destroyed and was not paid for by your insurance. Use one line per item, and add more pages if you need them.

Tips for finding proof of purchase

  • Lost your receipts? That's common, especially after a fire. If you bought the item online, check your account order history (for example, Amazon, Walmart, Best Buy, or the store's website). A receipt may still exist there.
  • Check your email for order confirmations, and your bank or credit card statements for the purchase.
  • Check product registrations and warranties. Manufacturers often keep a record of the model and purchase date.
  • Look for older photos that show the item in your home before the loss.

Photos of damaged property

Please include photos of each damaged or destroyed item if you have them, even if the item is badly burned or broken. Some scenes are wrecked and items can't be photographed. If so, note "no photo" and describe what was left.

# Item description Brand Model / serial no. Year purchased Where purchased Amount paid Proof of purchase? Photo?
1 $ Yes / No Yes / No
2 $ Yes / No Yes / No
3 $ Yes / No Yes / No
4 $ Yes / No Yes / No
5 $ Yes / No Yes / No
6 $ Yes / No Yes / No
7 $ Yes / No Yes / No
8 $ Yes / No Yes / No
9 $ Yes / No Yes / No
10 $ Yes / No Yes / No
Total $

I confirm that the items listed above were damaged or destroyed in this loss and that the information is true and accurate to the best of my knowledge.

Insured signature: ______________________________ Date: ____________