How to Choose a Contractor for Insurance Repair Projects

Have you had a major or minor catastrophe at your home? Is your homeowners insurance dealing with you to estimate the amount of damage? Do you feel that you are not being treated fairly by the insurance company? Do you have a contractor to do the work?

In the next few paragraphs, I will try to provide you with a few tools to help you through the process.

First, let’s take a look at what to expect from the insurance company. When you call your provider, they will send out an adjuster (a person to examine and list the damage). The adjuster can work directly for your insurance company or he can be an independent adjuster hired by the insurance company. Either way, he will walk the property and make notes of the visible damage. Once he makes his notes he will put together a claim estimate and deliver it to you. Do not accept their proposal or settlement offer at this point. Remember he works for the insurance company and can only give you an estimate on the damage that he can see! If you are dealing with the lost of occupancy the insurance company is often require to provide you a place to live while the damage is repaired.

Second, let’s try to find some help. Probably the best place to start to find a repair contractor is your neighbors, friend and family. Have they used someone that they would recommend? If that fails, there are several web sites that can provide you with reputable contractors to estimate the work. After you have the number to several contractors, unless you have a contractor in the past, and are comfortable with the workmanship and competency, call set up an appointment with each to review the job.

Set the appointment at certain times, let’s say 8am for the first, 12pm for the second and 3pm for the third and so on. There are two reasons for this method. Number one, is to keep the contractors from being there at the same time. This eliminates the competition element and allows the person doing the estimate to concentrate his efforts directly with you. The second reason for setting certain times is to judge the promptness and professionalism of the person you are dealing with. If you set the appointment for 8am, expect them there on time! If there are a true professional, they will be there a little early or will call, even if they expect to be only five minutes late. This may just give you some insight into how you will be treated in the future. If he or she is late for their first appointment, how can you expect for them on time when it’s time for the work begin.

Once the contractor arrives there is a list of questions that you need to be prepared to ask.

1. How much insurance work have you done? Your contractor need to be versed in the way insurance companies do business. You don’t want to be the first one. Test question: how does the insurance company handle depreciation and what do I do about the depreciated value? Answer: the insurance company pays the depreciated value after the job is completed.

2. Is your estimate compatible with the insurance company’s way of estimating? Insurance companies use software programs that estimate everything on a line by line item. The cost of the repaired items is automatically calculated based on a national average or by region. If the contractor doesn’t use estimating software that is based on the same calculations, more than likely it will be rejected by the insurance company, an asked that it be revised. This will only delay things, putting your repairs off until a settlement is reached.

3. Ask do they deal with the insurance company direct? Most contractors that do insurance work would rather deal directly with the adjuster. They have the knowledge to communicate any concerns, or missing or overlooked items on the adjusters claim form. Reputable and knowledgeable contractor will communicate to the insurance companies that any hidden damage will increase the amount of the claim.

4. Ask for references. Don’t be afraid to ask for phone numbers and address of the contractors past two jobs. And ask for a reference for at least one or two customers that he done work for over one year ago. The reason for this, is, does the company stand behind its work. If they refuse to provide you with customers from its past, BEWARE.

5. Ask for a copy of their business license and liability insurance. Most contractors can call their insurance carrier and have a copy emailed to you, or they can give you the agents name and number, this will verify that the policy is still valid. They will issue a certificate to cover you once you sign the contract for work to begin. Unless the insurance certificate is issued with you as a covered insured, you won’t be.

6. Ask who will do the work and who will supervise? You will be surprised at the different answers that you may get. The best answer is, we do the work. If your contractor has his own crews, he can ultimately control the quality of the work. If he uses all sub-contractors make sure that he intends to either supervise the contractors himself, or has a superintendent that will be there to oversee the job. The sub-contractors should never be let to set their own schedule with the homeowner. EVERY phase of the job goes through the contractor first. Also, the contractor should inspect every phase of the job and inform the homeowner of progress, problems and completion dates.

7. Make sure that the contractor has a Contractor Agreement that states the start and completion date. Do not leave it open ended. The contractor should be able to give you an estimated time of completion. Hold them to it! On larger jobs is not uncommon for contractor to set a pay draw schedule based on the amount of completed work. This perfectly natural, this keeps faith between you and the contractor. The contractor should only get paid for work completed. Understand however, that sometimes once work has begun, more damage may be found, this will accordingly delay things. If further damage is found, a contract addendum should be issued and a separate addendum claim submitted to the insurance adjuster so that he can schedule to visually inspect the damage, or give the approval to proceed.

8. Once work is complete. Ask for a completion certificate and a release of lien certificate. This will release the funds set aside on the depreciated value part of the claim. This will also protect you from the unlikely event of any unpaid sub-contractors or suppliers of material. Do not make a the final payment until you a signed lien release certificate! You will need this in the future if a sub-contractor or supplier comes to you for payment.

If you follow these basic guidelines, hopefully you and your property can be made whole again with as little discomfort as possible. I know how dramatic a sever lost can be. I have been a contractor for the past 15plus years and have dealt with homeowner tragedy many times. The best of both worlds is when the contractor and the homeowner part ways as friends.

If you have any further questions, I also work as a consultant for contractors, builders and homeowners. You can contact me by email at Russ Cochran Ent at msn.com, all small letters and no spaces. I am located in the north Georgia area but travel through out the southeast.

Once again, I hope that this short guideline helps and God Bless.