1. Shop around
Get three estimates even if your insurance company is picking up the majority of the cost. This is not just to compare costs, but to find a qualified contractor. Each one may have different ideas and best practices.
If you are repairing your home after a storm or fire, don’t hire the first company who shows up on your doorstep. It’s ok to talk to a contractor who is already doing work in your neighborhood. However, you still need to do your diligence and seek out bids from other contractors.
Once you find three companies to consider, search for complaints with the Better Business Bureau and other consumer websites. Take them with a grain of salt, as not every consumer complaint is legitimate. Sometimes there are disgruntled customers. However, if you see a troubling pattern of complaints you might want to keep looking.
Ask for references and call them.
2. Make sure the company is licensed
In Florida, you need to be licensed to do most construction, HVAC, repair type work around one’s house that you would experience after a severe storm. Search to make sure the company you are considering has a license. This ensures they have the proper education, worker’s compensation, and liability insurance. Under state law, they are also required to pull permits.
If you have a problem with a licensed contractor, you can report it to the state.
You can also search to see if the state has taken action against your contractor in the past. All complaints are not listed. Only complaints where the state found probably cause. Click here to search for a licensed contractor. When you find their name, click complaint history to see if the company has previous problems.
Finding a licensed contractor in Florida is not always as easy as searching a company name. If you search the company name, and don’t find anything, check the company’s website for the license # associated with them or ask. In Florida, the license is held by an individual known as a qualifier. It’s supposed to be a person who has direct knowledge of the daily activities of that business, but that’s not always the case. Regardless, that qualifier is ultimately responsible for what happens on the job. Most Florida companies post the license number associated with their business on their website or contract.
3. Ask for a copy of the company’s insurance
Before you allow the contractor to do any work at your home, request a copy of their insurance. It’s easier to get a copy before work begins than after an incident. You want to make sure you’re protected if something happens on the job site.
4. Be leery of “Assignment of Benefits” paperwork
Many contractors will tell you they’ll handle the insurance paperwork for you. They do this so they can directly collect the money from the insurance company. Most assignment of benefit agreements are full of fine print that give your contractor a lot of power to negotiate with the insurance company. Read them carefully, and avoid signing one if possible.
Your contractor may tell you that not signing an AOB will slow down the claims and repair process. Don’t fall for the scare tactics. You have rights, and make sure you know the impact of what you are signing.
Be leery of a company that promises this. It’s always best for the homeowner to be in the driver’s seat when it comes to the finances of the project. Only pay for the service performed.
AOB’s are controversial in Florida, and some insurance companies blame them for skyrocketing rates. The insurers say unscrupulous contractors inflate claims with AOBs leading to litigation, and you the homeowner and policy holder are left out of the entire process.
5. Pay as you go & pay suppliers directly
Even though you’ll be holding the money from the insurance company, (remember no AOB’s), the money still might make its way to the mortgage company. They have a lien on your property so they have a financial interest in the repairs. You still need to watch the money closely and make sure your contractor only makes draws as the work progresses.
If you get the full insurance check, do not hand over the full check to your contractor. Pay as you go.
Some contractors may require a down-payment. Try to avoid this if you can, but if you can’t make sure it’s reasonable and no more than 1/3 of the project cost.
With so much destruction, some contractors will see this as a money grab. They’ll collect a lot of money upfront and later on some of it may not trickle down to the suppliers. Guess who loses again? You the homeowner. So to protect yourself, request a list of suppliers and subcontractors if possible, and pay them directly. That way you are sure everyone is paid appropriately and you will prevent subcontractors from filing liens on your property. It’s very easy to file a lien on your property, so you need to protect yourself before hiring a contractor.