Following a major disaster, policyholders will be faced with an important decision—which restoration contractor should be hired? Many policyholders will be directly solicited by strangers with construction contracts and oral promises that seem too good to be true. Policyholders should never sign a contract with anyone who is pressuring them to do so. Policyholders should always investigate the people and entities with whom they are going to sign a restoration contract.
In Pay Up!: Preventing A Disaster With Your Own Insurance Company, I provide some background and discussion on this topic about the type of restoration contractor that should be hired:
Though rarely thought of as such, contractors are also loss experts. They are on the ground doing the actual work of repairing and restoring property after losses. They know as much, if not more, about certain aspects of the repair process for structures than actual adjusters. …
Reputable and quality-minded contractors can be valuable assets to policyholders. The average policyholder has no way of knowing when the construction work is done right. Construction and restoration are skilled trades. Using the wrong kind of roofing can result in problems in the future. Using the wrong nails on a particular shingle or failing to place the nails to spec can result in leaks or the roof being damaged in high winds or heavy rain. The details of construction matter—and the average policyholder simply does not have the expertise to recognize the fine details of quality construction. Good contractors do, which makes them experts in their specific domain. No one knows a quality roof repair better than a qualified and experienced roofer. When you hire your own contractors, so long as they are reputable, bonded, and willing to guarantee the work to manufacturers, you can better trust them to explain how to do the job right.
Even when you can pick your own contractors, the insurance company is still going to send out their adjusters to influence how repairs are made and the price to be paid. Good-quality contractors can push back and make sure that the work is done right. As compared to the average policyholder, experienced contractors are better equipped to insist that the job be done properly with quality materials according to the manufacturer’s recommended methods.
To be clear: contractors cannot negotiate your claim with the insurance company. That’s a job for you, a licensed public adjuster, or an attorney—no one else. However, contractors can serve as your eyes and ears on the ground. They can also advocate for you indirectly by doing work properly and in accordance with relevant laws. They can also let you know when work is not being done properly or according to regulations.
When looking for contractors, make sure they are licensed, bonded, credentialed, experienced, and reputable. They should have good references and years of experience. Unfortunately, finding good contractors after a major regional disaster can be difficult, as the best contractors are booked quickly.
You can also hire your own professionals to oversee the restoration process. Owners’ representatives are found in planning, architecture, and engineering firms. You can hire them to be your on-site representative during the repair process and in many cases may even have the cost applied as a reasonable cost of construction. They are not there to manage the contractors. They are there to make sure that the contractors do their job right. Good contractors don’t mind being observed. It’s only contractors doing low-quality work and cutting corners who don’t want experts watching them. You can’t always rely on government inspectors to ensure that construction is done properly and legally.
The larger the repair, the greater the need for your own representative on-site. The average policyholder doesn’t know how construction is supposed to be done. You need a construction expert overseeing the repairs and making sure they are done to specifications and building codes. Commercial construction should always have representatives of the policyholder overseeing the work. Homeowners should also have representatives for major repairs. If your entire house is being gutted and rebuilt from top to bottom, you want the work done right by quality workers with your best interests in mind.
In Do Not Make These 7 Mistakes When Choosing a Roofing Contractor After a Hurricane, I noted a tip from the National Roofing Contractors Association:
Often following a natural disaster, unprofessional contractors will try to take advantage of unsuspecting homeowners. If it is necessary to hire a roofing contractor, you should keep a healthy skepticism about the lowest bid. If it sounds too good to be true, it probably is. Price is only one criterion for selecting a professional roofing contractor; professionalism and quality workmanship also must be considered. Take some time to evaluate potential contractors before any reroofing work begins.
For Hurricane Ian victims, I provide the following tips:
- Pick only a Licensed Contractor. Ask who holds the license and whether that person will be on site overseeing the construction.
- Accept only a contract based on a written proposal with fully detailed written explanations of the materials, costs of permits, and detailed description of the work to be done with a price.
- Only accept a restoration contractor with actual backup and evidence of their industry professionalism, manufacturer certifications, association memberships, and training of workers. Verify what is provided to you through a search and calling to confirm the evidence.
- Only accept work from those with a permanent business address and being in the business long enough to show financial stability.
- Only accept a contract with warranties backed up by a manufacturer. Construction contracts should have material specifications about the work and materials to be used.
- Only accept a contract from a contractor that can show you in-state references; call the references and do a Google search about the company and the people involved. Never get pressured to sign a contract right away.
- Do not sign with those who demand money up-front before the materials are on site, who say permits are not needed, cannot show proof of insurance, and who fail to pass all seven of these points when you show it to them.
Reputable, experienced, professional contractors do not pressure people to sign contracts. Many storm-chasing contractors use salespeople who you will never see again. They are professional sales closers skilled at getting people to sign contracts. Who are the people that are going to do the work? Who will be the foreperson? Does the contractor mind if you hire an owner’s representative to ensure the work is being done correctly?
In this day and age of fake advertising on the Internet, it is important to perform the due diligence and find people with a record of success doing restoration construction.
Finally, the best time to do a remodel to your property is after a major loss. You do not have to rebuild the structure back to the way it was. The cost to repair or replace is just a theoretical amount of money that can be used to rebuild and repair the way you want. Unfortunately, many adjusters and contractors fail to tell policyholders that they have this choice.
Thought For The Day
Beware, so long as you live, of judging men by their outward appearance.
—Jean de La Fontaine
