When you have an emergency that causes property damage in your home, the first thing on your mind is restoring your home back to normal. And usually one of your first phone calls is to the insurance company to find out if the property damage is covered and how you can start to file a home insurance claim.
Most companies will provide you with a representative such as a claims adjuster to start the process. This person will guide you through the steps involved in getting your home repaired, the contractor bills paid, and your life back to normal. Whether you’ve got a flood, fire, wind, or other damage, you’ll definitely need a contractor to repair it, so let’s discuss a few things you need to know in order to find the right professional.
Here at GreatBuildz, a free service that connects homeowners with reliable general contractors, we speak to homeowners every day about hiring a contractor to repair their home insurance damage – here are some tips to get you started.
How To Begin a Home Insurance Claim Process
When you have property damage that is due to a “covered peril”, the insurance company is expected to cover the cost to repair it, less your deductible. Because it’s likely that you haven’t read the fine print of your insurance policy, you’ll need to start by making a call to your insurance company or insurance agent to confirm your damage will be covered. They can connect you to the right person to handle your claim and guide you through the process.
This representative is usually called a claims adjuster, and they will need to actually come to your home and perform an inspection of the damage. This person will generally be your point of contact during the entire process and interact with you about paying the contractor for the costs of making the repairs.
An adjuster should be assigned to your case as soon as you file a claim. Talk to your adjuster about how quickly you can get the first insurance check to cover any emergency work that was required to limit the property damage. For example, if you had a flood, you may have called an emergency plumber to repair the broken pipe before it caused more water damage. You may have also called a ‘restoration contractor’ to urgently remove the water and install air scrubber fans to dry the area.
Restoration Contractors vs. General Contractors
In an emergency, the first thing you’re worried about is solving the most pressing issue, whether that’s dealing with smoke, water intrusion, or any other damage. For this immediate, urgent work, you’ll need to hire a restoration contractor. This type of professional is trained and experienced in performing the mitigation work needed to address the issue and prevent further damage. They are generally available on short notice; they have specialized equipment and the certifications to do such ‘hazardous’ work as removing mold, asbestos, or lead paint.
Restoration contractors might quickly remove and discard any water-soaked areas such as flooring or drywall so that your home doesn’t develop mold. Or they might bring in air-scrubbers to start filtering the air from smoke damage, etc. These contractors are usually very accustomed to working with insurance companies, but make sure the company you choose is willing to deal with your insurance company, supply any necessary documentation, and wait on them for payment.
So, although your best bet is to call a restoration contractor to deal with the immediate emergency, the next step in your process will be to ‘rebuild’ the areas that have been damaged. Although some restoration contractors also offer this service, you’re probably better off finding a quality general contractor to do this work, especially if it’s a major project (over $10,000) that includes flooring, cabinetry, roofing, etc. Because general contractors specialize in this type of construction, their staff and subcontractors are more likely to perform this work to a higher quality standard.
Which Contractors Can Perform My Home Insurance Claim Repairs?
When you start speaking to the adjuster about your home insurance claim, they will probably instruct you to start getting estimates from contractors to repair and restore the damage. Depending on the occurrence, this may include roof repairs, drywall replacement, flooring replacement, cabinetry replacement, etc. The adjuster may give you a list of contractors that are in their network and they will also usually allow you to find and select your own local experienced contractors.
Getting an estimate from one or more of the insurance company’s contractors is a good idea, but make sure you do your own research on these companies. Don’t rely on the insurance company to know whether a contractor is reputable. Check their reviews online and at the BBB, check their contractor’s license, get a copy of their insurance certificates, and ask to speak to their references. In addition, it is probably a good idea to also get a few estimates from contractors that come referred to you, who are not on the insurance company’s list.
That way you can compare your options and choose the best fit for you. You have the final decision about which contractor you want to use to make the repairs. You don’t always want to choose the lowest-priced contractor, regardless of whether they are approved by the insurance company or not. A poor contractor can make your life miserable even if you aren’t paying his bills.
Collecting Contractor Estimates
Make sure that every contractor you speak with and invite to bid on your repairs is made aware that this will be paid through a home insurance claim. Not all general contractors are willing to perform insurance restoration projects.
Ask each contractor for a detailed estimate of the work necessary to restore your home to its previous condition. It’s even helpful if your adjuster gives you some guidance as to the scope they will approve for the entire project. Once you have all the contractor bids, you’ll want to send a copy of each of these to your insurance adjuster.
Hopefully, your adjuster will approve the amount necessary to cover the costs of your preferred bid, but it’s possible the adjuster’s estimate of the work will be lower. In this case, you’ll need to have a discussion with them about the difference and how you can bridge this gap. You may need to negotiate with your contractor to bring down the price or get other contractor estimates.
Once the adjuster gives you approval of the budget you need to complete the work, have your contractor prepare a complete work agreement and contract with all the terms laid out. Send this to the adjuster to ensure they see no issue with the format and terms. Depending on the insurance company, they may pay the contractor directly or send you a check and have you pay the contractor. Make sure you don’t sign any contracts or pay anything to the contractor until your adjuster lets you know your claim has been approved for the amount you need.
How To Choose The Right Contractor
Regardless of whether you’re considering a contractor from the insurance company list or not, it’s ultra-important for you to select a quality, reputable professional. If you end up hiring the wrong company, you might have to deal with constant delays, poor workmanship, and miscommunications.
If you care to have a successful, stress-free restoration, the most important thing is to hire an honest, reputable contractor. Again – make sure to ask each contractor whether they are willing to work on a project with a home insurance claim…not all contractors are willing to do this.
In all situations, the ideal way to find quality contractors is to ask friends, neighbors, or coworkers for contractor recommendations they’ve used. On social media platforms, you should ONLY trust suggestions from ‘real’ friends. Other people are often untruthful (they’ll suggest their cousin the contractor, etc).
If you can’t get suggestions from friends, family etc, you might consider using a service that performs strict contractor vetting and offers personalized recommendations to home insurance damage contractors (www.GreatBuildz.com or similar). Please don’t select a random contractor from a junk mail flyer or someone from a contractor listing site.
How To Get Paid On a Home Insurance Claim
When you speak with your insurance company’s claims adjuster, make sure to get a clear understanding of their payment process.
When will they make payments? Will those payments get paid based on the contractor’s progress? Will the payments get made out to you or directly to the contractors?
You’ll need to know their process because you’ll have to communicate it to your general contractor. Your contractor needs to be aware of when/how they can expect to get paid, and this process should be detailed in their written construction agreement with you.
If your insurance company plans to pay your contractor directly, they will probably provide you notice of any payments they intend to make and have you agree to each payment. Make sure that you review these requests carefully to ensure the contractor’s progress is commensurate with the payment schedule. It’s never a good idea to pay the contractor for more work than they have performed; it can cause delays because the contractor doesn’t feel any urgency to finish the next stage of the job in order to get his/her payment.
How To Keep Good Records During Your Property Damage Claim
It’s a good idea to keep all your home insurance claims records in one safe place so you can keep track of all communications, paperwork, agreements, and payments. It’s not uncommon for miscommunications or questions to arise between you, the contractor, material suppliers, the insurance company, etc. Keeping good records will help you reconcile or recall details from the past.
Important documents to keep safe include:
- contractor agreement
- building plans
- payment records or canceled checks
- material receipts, bills & invoices
- insurance company communications
- payment schedules
- work scope
- insurance certificates, etc.
In general, your insurance company has the final say with regard to the amount they will pay out to settle your claim. In many cases, this works out just fine as they cover the costs of emergency remediation work, the cost to rebuild, and even may reimburse you for living expenses if you have to move out of your home.
However, in some cases the insurance company’s offer to settle the claim is lower than the homeowner feels is necessary to restore the damage. For example, maybe the insurance company is only willing to pay $5,000 for new cabinets, but their contractor bid this portion of the project at $8,000 because you want to use a high-quality product.
If you feel like your insurance company is offering too little money for your claim, you can certainly try negotiating or working with your claims adjuster to explain your perspective. Alternatively, some people choose to hire a “Public Adjuster” to help them negotiate with their insurance company. You would have to pay a Public Adjuster their fee for helping ‘consult’ on your claim, but they are generally well versed in how to deal with insurance companies and explain why you need a higher settlement amount.
GreatBuildz is a free service that connects homeowners with reliable, thoroughly screened general contractors and provides project support from start to finish.
Call now (818.317.3567) to chat with a real person about your property damage or insurance claim project or visit our website for more information: www.greatbuildz.com