How to Hire a Contractor for Your Insurance Claim

Woman talking with home contractor
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When it comes time to file your homeowners insurance claim, it is important to find a fair and reputable contractor. Unfortunately, there are contractors that prey on people’s fears and anxiety of what has just happened, especially when there is a large disaster area involved. You may be approached by one of these sales people that often go door-to-door canvassing neighborhoods to generate new business to offer their cleanup and repair services.

While many of these people are honest and reputable, some are not. Below is a recommended list of 6 steps to take in order to protect yourself and find an honest and legitimate contractor:

1. Contact your insurance company and ask for the insurance adjuster assigned to your claim. Have the adjuster make an estimate of the damage and repair costs for your property. By having this estimate you will be able to have a negotiation tool when a contractor approaches you with their estimate.

2. The first thing you should request from a contractor before any work is done is their references. When looking for a contractor, call trusted friends and neighbors and ask them if they have any contractors they could refer to you. Also, 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 and request proof.

If the contractor is not insured, you may be liable for accidents that occur on your property.

3. Be very diligent about reading any papers the contractor wants you to sign. Make sure the contract is well written and includes provisions for you such as what work the contractor will guarantee and how long that guarantee lasts.

In addition, verify that there is a cancellation policy that provides you at least 3 business days to cancel the signed contract for any reason, as this will give you time to review the contract just in case you felt rushed to make a decision. Better yet, ask the contractor to leave you a blank copy of the contract to review overnight and avoid contractors that will refuse to do so. Also, make sure a date of completion is included in the contract. If you are confused about what the contract offers, consider having a lawyer review it before you agree to the terms.

4. 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. Furthermore, avoid contractors who offer you unrealistically low estimates.

5. Never pay a contractor for the entire project in advance or before the work is completed. Also, pay by a personal check instead of cash so you can retain your cashed check as a receipt.

6. 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 and material suppliers.