How to Hire Insurance Repair Contractors

woman talking with home contractor

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When it comes time to file your homeowner's insurance claim, finding a licensed contractor who has the right skill set to manage the repairs on your home is important. An insurance company can usually recommend contractors who can get the job done, but if you want second opinions, or to get your own contractor then you should look for some basic things to help you decide if the contractor is reputable and will be able to do the job.

5 Things a Good Contractor Should Provide You With

  1. A written estimate, detailing the costs of material and labor as well as the types of work that will be done
  2. A general time frame that you can expect the work to be completed in
  3. Their contractor's license number, the insurance policy number for their contractor's general liability, and amount of liability insurance they carry.
  4. How long they have been doing this kind of work
  5. Although not all repairs or contractors will guarantee work, it is a good idea to ask about this. If you have the option, take a contractor who can give you a guarantee on their work.

You should not be expected to pay for the above information. A good contractor generally knows that it's part of the business when bidding on a job and working with insurance claims to give an estimate.

You will need this information to present to your insurance adjuster in to have them approve the repairs on your home. The claims process is usually longer for large losses and claims than it is for smaller ones. Learn more about what to expect in a disaster claim here, and don't forget to check into additional living expenses and how they work too.

How to Know If a Contractor Is Legitimate

You can contact local state departments to find out if a person representing themselves as a contractor is legitimate. Licensed contractors should not have a problem providing you with information showing their qualifications.

There are people or general handymen who prey on people’s fears and anxiety during a disaster claim. If you are ever approached by one of these salespeople that go door-to-door canvassing neighborhoods offering cleanup and repair services, let them know you are working with an insurance company and you require a formal bid. If they are legitimate, they will be willing to put in a professional bid on doing the work. While many of these people are honest and reputable, some are not. 

Tips to Find Good Insurance Claim Contractors

When you have an insurance claim, the insurance company is responsible for paying the damages if the damage happened due to insured perils. Insurance companies have many well-known contractors they work with and can often recommend a good reliable contractor to you, or even offer you options. Consider taking advantage of their expertise and help in the situation, after all that's what you pay insurance for: to help you in a claim. This is the easiest and best way to find a reputable and accountable contractor.

You are always free to get second opinions and negotiate with your adjuster. By choosing the contractor the insurance company selected, it often protects you because those contractors are accountable to the insurance company.

Insurance companies provide contractors with many jobs and are big clients to them. Letting the insurance company take care of it can save you a lot of stress, time, and trouble. 

Steps to Take to Protect Yourself With a Contractor

Below is a recommended list of steps to take in order to protect yourself and find an honest and legitimate contractor.

1. Get a Written Estimate from The Insurance Company Contractor

Have the adjuster get the insurance company contractor to assess the damage and make an estimate of the damage and repair costs for your property. The insurance adjuster will know what kind of coverage you have on your policy and will be able to help guide you accordingly. 

Sometimes there will be a difference in the estimate from the insurance company contractor and your contractor. If this happens you need to get your insurance adjuster to review the estimate from your contractor and let you know if the work will be approved. Otherwise, you may not get paid.

The insurance adjuster must always agree to the repairs you are doing, before they are done, or you may not get paid.

2. Check Contractor Licensing and References

The first thing you should request from a contractor before any work is done is their references. When looking for a contractor, check online reviews, call friends and neighbors and ask them if they have any contractors they could refer to you. Ask the contractor if they are part of your area’s Homebuilder’s Association and the Better Business Bureau. Most importantly, make sure the contractor is licensed and carries liability and workers compensation insurance If the contractor is not insured, you may be liable for accidents and damage that occur on your property.

3. Read the Small Print and Get Insurance Company Approval

Be very diligent about reading any papers the contractor wants you to sign. When you are hiring a contractor for the insurance claim, you need to be speaking to your insurance adjuster because in an insurance claim you don't have the authority to approve repairs on your own. It is only when the insurance company approves repairs that it gets paid. You can ask your adjuster if they can speak to your contractor to discuss the estimates before anything is agreed upon.

Make sure the contract is well written and includes provisions such as what work the contractor will guarantee and how long that guarantee lasts. Look for the date of completion or what the estimated timeline for the repairs will be.

If you are confused about what the contract offers, ask your insurance adjuster to help you. The insurance company will also be able to tell you if your additional living expenses would be covered for this time period or not.

Contractor delays caused by a contractor of your choice would not be covered by an insurance company.

If you want help understanding wordings of the legal contract, consider contacting legal assistance services which many home insurance companies may offer as part of your policy for free or low costs.

Insurance contracts have clauses in them that limit and dictate how claims will be paid and what work will be approved. Your insurance adjuster or insurance company representative or broker can also help you understand this.

4. Check Costs of Temporary Repairs and Debris Removal

Pay attention to how much the building contractor suggests you spend on temporary repairs. While payments for reasonable temporary repairs are covered as part of the total insurance claim settlement, you don’t want to pay a contractor too large a sum for temporary repairs, since this may deplete the total amount of money you will need for the permanent repairs to be completed.

Always call your insurance adjuster and get their approval before allowing repairs. If an insurance company is not given the opportunity to review damage and approve work, it may not pay.

If there is significant damage, there may be costs involved for debris removal, make sure these are included in the estimate, and if not, ask your insurance company about this.

Avoid contractors who offer you unrealistically low estimates, the insurance company is paying for the repairs for you, so don't cut costs.

5. Never Pay Contractors in Advance

Never pay the contractor before speaking to the insurance company. The insurance company will usually pay them directly or they will issue a check payable to you and the contractor that you will both sign off on. You should never be paying out of pocket unless it is for temporary repairs, in which case you need the receipt detailing the exact work done, and remember this work must have been urgent "in order to prevent further damage". In an insurance claim, you will never have to pay a contractor for the entire project in advance or before the work is completed. If you are asked to do so, call your insurance company to deal with it. 

6. Keep a Notebook With All Claims Repairs Information, Receipts, and Details

Keep a job file of all communications with your chosen contractor and all papers related to work being done. This file should include:

  • the signed contract
  • plans and specifications of work being done
  • bills and invoices
  • canceled checks
  • copies of the certificates of insurance
  • information about any subcontractors your contractor may use or material suppliers

Keeping track of all the information will help your claim go through smoothly and make sure you get payments as quickly as possible.