If your home or business has suffered significant damage, perhaps from fire or, as many did during the recent east coast natural disasters -- from the earthquake in Virginia to tropical storm Lee (and don't forget Hurricane Irene), then then finding a building contractor for repairs is undoubtedly a priority. The Federal Emergency Management Agency (FEMA) warns to exercise caution when choosing your contractors so that you avoid being a victim all over again.
You would be correct to suspect those who claim to be contractors seeking jobs by going door-to-door or handing out flyers, especially if they require you to sign a contract on the spot. Furthermore, be skeptical of those who require large up-front deposits or payment in full in advance. If they turn out to be unscrupulous, they will likely begin the job but then disappear before the work is done. Why? If your "contractor" turns out to be an unscrupulous scam artist to whom you pay a large amount up front, chance are that they will begin the job but will then disappear before completion.
It would be wise to ask a lot of questions if a so-called "contractor" proposes doing temporary repairs to your building's damage at a large cost before focusing on the issue of permanent repairs that will be ultimately needed.The Insurance Information Institute points out that the insurance settlement you receive is typically intended to cover both initial temporary repairs if/as necessary as well as permanent repairs for a given loss. Therefore, if a large portion of your funds are spent on such a temporary fix, it is possible that you will not have enough funds remaining to cover the permanent repair job. See more advice from the Insurance Information Institute (III): Beware Crooked Contractors (Video).
So how can you know that a contractor is honest and reputable before you sign any contract to have repair work done? Your best assurance will come choosing a contractor who haseither done work for you or someone else you trust in the past. Don't know such a contractor? Ask your insurance agent who can probably refer you to someone who is reliable. Likewise, your local building/trade associations might make a referral. But if you must use a contractor who has not done work for you before, regardless of the source of the referral, always check references before signing the contract.
Whether you are the victim of a widespread natural disaster or just a home or business owner with property in need of repairs, if you will be working with contractors, consider the following tips:
- If you have a loss due to property damage, be sure to contact your insurance agent as soon as possible to discuss your options and receive assistance.
- Check the contractor’s reputation and see if they have any complaints filed with the local builder/trade organizations or the Better Business Bureau.
- Ask for a written estimate that all work to be done and showing all taxes or other fees.
- Require a Certificate of Insurance from the contractor to be sure that the firm has active workers' compensation and disability insurance to cover any workers’ accidents. If not, then you could be liable for such accidents on your property.
- Obtain a written contract that specifies all associated costs and payment schedulefor the project. It should also lay out all work to be performed. Never sign a contract that is not comprehensive and specific.
- Determine who is responsible for obtaining all permits and licenses related to your job and insist that it be included in any contract that you sign.
- Ask for a written guarantee in which there is a stated duration as well as noting exactly what is guaranteed and whether there are any stipulations or restrictions.
- Make your payment by credit card or check but never by cash.
- Be sure to read carefully any contract cancellation clauses. You should be able to cancel a contract within three business days of signing.
Here at the William M. Sparks insurance Agency, we are experienced in helping our policyholders recover from losses with as little discomfort as possible. We'd be pleased to have you contact us at your convenience to discuss any of your insurance needs -- including how to be best prepared to handle damage to your home or commercial building.