How to Hire Insurance Repair Contractors

Tips for finding a good contractor when you have a claim

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 key. Many of the top home insurance companies can recommend contractors who can get the job done. Using a referred contractor from your insurance company can give you peace of mind because the insurance company screens the contractor for you. You may still want second opinions, or to get your own contractor. Then you should look for some basic things to help decide if the contractor is reputable and will be able to do the job.

5 Things a Good Contractor Should Provide

  1. A written estimate. This details the costs of material and labor as well as the types of work that will be done.
  2. A general time frame you can expect the work to be completed in. It should include their contractor's license number, the policy number for their contractor's general liability insurance, and the amount of liability coverage they carry.
  3. How long they have been doing this kind of work and how many jobs they have completed recently.
  4. Not all contractors will guarantee work, it is a good idea to ask about this. If you have the option, choose one who will guarantee their work.

Do not expect to pay for the above information. A good contractor knows 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 so they can approve the repairs on your home. The claims process is usually longer for large losses and claims than it is for smaller ones. Don't forget to check into extra living expenses if you have to leave your home during the work.

How to Know If a Contractor Is Legitimate

You can contact the local building department or a consumer protection agency to assess if a person is a legitimate contractor. Licensed contractors should be able to produce proof of their qualifications.

Some general handymen prey on your fears and anxiety during a disaster claim. If you are ever approached by a door-to-door salesperson, request a formal bid. Some will canvass neighborhoods to offer cleanup and repair services. Let them know you are working with an insurance company. While many of these people are honest and reputable, insurance fraud cases often involve fake contractors or dishonest workers. Anyone legitimate will be willing to put in a professional bid for doing the work.

Tips to Find Good Insurance Claim Contractors

The insurance company must pay if the damages in your claim were due to insured perils. They work with many contractors and can suggest a good reliable one. Use their expertise and help. That's what you pay for. This is the easiest and best way to find a solid contractor.

You are always free to get second opinions and negotiate with your adjuster. When you choose a contractor the insurance company selects, it can protect you. These 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

These steps can protect you and help you find an honest and legitimate contractor.f

1. Get a Written Estimate From The Insurance Company Contractor

Have the adjuster get the insurance company contractor to assess the damage and estimate 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. 

There is sometimes a difference between the insurance company contractor's estimate and your contractor's. If this happens, you need to get your insurance adjuster to review your contractor's estimate and let you know if the work will be approved.

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 or Better Business Bureau. Most importan, make sure the contractor is licensed and carries insurance for liability and workers' compensation. If the contractor is not insured, you may be liable for accidents and damage on your property. Ask for copies of the insurance certificates.

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. It is only when the insurance company approves repairs that they pay. You can ask your adjuster if they can speak to your contractor about the estimates before anything is agreed upon.

Ensure the contract is well written. Include details such as the materials used, work the contractor will guarantee, and how long that guarantee lasts. Look for the date of completion or an estimated timeline for the repairs.

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

If you want help understanding the legal contract, ask your adjuster or insurance agent. You can also turn to legal assistance services.

Insurance contracts have clauses that limit and dictate how claims will be paid and what work will be approved. Your insurance adjuster or an insurance company representative, or broker can also help.

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 claim settlement, you don’t want to pay a contractor too large a sum for anything short-term. This may deplete the total amount of money you will need to complete the permanent repairs.

Always call your insurance adjuster and get their approval before allowing repairs. If an insurance company has no chance to review the damage and approve work in advance, 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. If they aren't, ask your insurance company about this.

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

5. Never Pay Contractors in Advance

Never pay the contractor before speaking to the insurance company. The insurance company can pay them directly. They may choose to issue a check payable to you and the contractor that you will both sign off on. You should never pay out of pocket unless it is for temporary repairs. In this case, get a detailed receipt showing the exact work done. It must be urgent so as "to prevent further damage." You will never have to pay a contractor for the entire project in advance or before the work is completed in an insurance claim. If you are asked to do so, have your insurance company 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 and materials to be used
  • bills and invoices
  • canceled checks
  • copies of the certificates of insurance
  • information about any subcontractors or material suppliers your contractor may use.

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