Guide to Selecting Contractors for Insured Repairs

Hurricane Ian was one of the most destructive hurricanes in recent history. In its aftermath, homeowners were left with the daunting task of repairing and rebuilding their homes and lives. We understand how overwhelming that process can be, especially when it comes to selecting a contractor. To guide you through At Claimly, we’re here to help and provide valuable insight to help you make these daunting decisions a little easier. So, here are some key aspects to consider as you begin your rebuilding journey.

Claimly Team

November 8, 2022

1. Key Takeaway

2. Key Takeaway

3. Key Takeaway

What is an Assignment of Benefits?

How Does an Assignment of Benefits Work in Practice?

Are There any Downsides to Signing an Assignment of Benefits?

Do I have to sign an Assignment of Benefits?

Are There any Benefits to Signing an Assignment of Benefits?

Can my insurance policy restrict the use of AOBs?

Data

Do I have any rights or protections concerning Assignments of Benefits?

Overview

When it comes to choosing a contractor, there are at seven important questions you should ask.

1. What is the contractor's reputation?

2. Can the contractor show you proof of insurance?

3. Where is the contractor's closest place of business?

4. How soon can the contractor do the work?

5. Is the contractor licensed to perform the work?

6. How long has the contractor been in business?

7. How big is the contractor’s company?

Now that you know what to ask, let’s explore the issues in more depth.

What is the Contractor’s Reputation?

Reputation is one of the most important factors in selecting your contractor. Read reviews from past customers on Google, Yelp, social media, and the Better Business Bureau website. If you can get it, word of mouth from friends, neighbors, or family is always valuable feedback. If you can't find recommendations or ratings about the contractor online, you may want to think twice before selecting the contractor.

Don't forget, self-recommendations from the contractor don't count, no matter how nice or sincere the contractors may seem! Making a good first impression feels good, but it's no substitute for actual reviews from actual prior customers.

Can the Contractor Show You Proof of Insurance?

It is also important to make sure that the contractor has adequate insurance.

Don't just take the contractors' word for it -- ask them to show you their proof of insurance, which is typically in the form of a certificate of insurance (COI).

This will protect you in case of any accidents or damage that may occur during the repair process. Ask to see proof of their insurance coverage. Every contractor needs to have liability insurance, should something go wrong during the construction process. They may also require their employees (if they are independent contractors) to have liability insurance of their own. Any contractor that avoids giving you this information should raise a red flag because all legitimate companies will have the insurance they need.

Where is the Contractor Located?

Although it’s not always possible after a large storm, it’s best to hire a local contractor, or at least a contractor with a location in the affected state or region.

The location doesn't have to be the contractor's headquarters. Selecting a contractor with a brach office or distribution center nearby is still a plus.

There are several reasons for this. First, local contractors will be familiar with the building codes, regulations, and licensing requirements in your area. Second, they are also less likely to skip town once you give them a check. Third, depending on the services they provide, local contractors tend to have better access to needed inventory and supplies, without which they can’t do their job. Lastly, it’s much easier to hold a local contractor accountable for bad work than it is to chase down an out-of-state contractor who didn’t properly perform.

How Soon Can the Contractor Do the Work?

It is important to find a contractor who can start the work as soon as possible. The longer you’re out of your house, the more expensive your living expenses become. In addition, houses with flood damage are prone to mold, mildew, and other issues, which need to be taken care of immediately. The longer your home lingers on a waiting list, the bigger its problems may become. If possible, have the contractor confirm in writing when they estimate they can begin work.

Is the Contractor Licensed to Perform the Work?

Another important factor to consider is whether the contractor is licensed in the state where they work. You can check with your state's licensing board to verify that the contractor is properly licensed. In most states, contractors need to be licensed with the state, county, and/or the city in which they do business. This can vary depending on location, but at the very least, the contractor that you choose should have some sort of official licensure. Keep in mind that some contractors may choose to go to Florida after a storm in order to pick up extra business. They’ll be licensed in the state that they mostly do business in, not the one that they traveled to. In order to ensure that your contractor is legitimate, they should be licensed in the state that they plan on working in as well.

How Long Has the Contractor Been in Business?

Learn how long the contractor has been in business. Although it's great to support a new business, selecting a newly formed contractor for your insurance repairs comes with risk, especially after a natural disaster like Hurricane Ian.

Well-established contractors will likely have a better understanding of how to do insurance-based work. For example, a new contractor may not realize that if its estimate isn't sufficiently detailed, the insurance company could deny coverage for the job, forcing you to resubmit the estimate and delaying your recovery even further. Older companies also are more likely to have established a reputation for their services, for better or worse. Finally, if a company has been in business for many years, it's likely to be in business in the future if any warranty problems arise.

How Big is the Contractor’s Company?

We love small and family owned business, but in large-scale disasters like Hurricane Ian, smaller contractors can quickly become overwhelmed with work. So unless you're one of the lucky few who connected early with a reputable small contractor, your best bet may be to find a larger operation. Size isn't a guarantee of quality, but all else equal, larger contracting companies are better equipped to handle disaster work. Their size gives them capacity to take on more projects, which hopefully means your home gets repaired faster. Their size also makes it easier for them to manage the cash flow shortages that come with doing insurance work, allowing them to offer you more generous payment terms on their work.