Residential Home Improvement Contractors – Protect Yourself With These Tips

As I say so frequently that I’m beginning to bore myself, “most remodeling contractors are honest and reliable individuals who want to do quality work at a reasonable price.” Unfortunately, there are just enough contractors out there (or people who claim to be contractors) who take advantage of their customers that some reminders and tips are helpful if you want to do everything possible to protect yourself and your property during home improvement.

1. Don’t make assumptions about referrals. Exercise the same due diligence in evaluating and checking out all contractors. You might have friends or relatives, co-workers or neighbors referring you to contractors they have used with good results. Many people are also simply trusting recommendations from home improvement stores. Even when you are referred to a contractor, check him or her out before you sign a contract. Consumer Reports recently released findings from a study of people who hired contractors to whom they were referred by the two leading home improvement stores. Their survey indicated that people who used these referrals had more problems and were less satisfied with the work than people who used other contractors.

2. Build your remodeling budget in a way that creates a 20% cushion for unexpected surprises. Although the National Association of the Remodeling Industry suggests an allowance of 10% to 20%, I think you are safer to budget for a 20% cost overrun due to surprises. There are literally hundreds of things that can happen or that can be discovered once remodeling begins that will result in a cost overrun. It is not uncommon, for example to discover termite damage, dry rot, damage from leaking pipes, outdated wiring, etc. My point is that you should not use your entire budget on the basics. You will be much more comfortable with your budget if you leave room for surprises.

3. Get a contract – don’t deal with a contractor on the basis of a proposal. If at all possible, get a contract that states a final price for the work, not an estimated cost that can go up or down. Your contract should be as specific as possible and as detailed as possible. It should also contain some kind of warranty for both the installation and the products or materials. You can also specify in the contract that all materials used will be new materials and meet the standards outlined in the contract. It should also state that any changes made during the construction period will be authorized only by written change orders that explain the difference in cost up front. If a contractor is unwilling to sign a contract stating the final price of the remodel, find another contractor.

4. Know what your insurance covers and take out a liability policy if necessary. It is usually easy to call your insurance agent and ask what is covered in terms of damage to your property, loss of property or possessions, and injury or death of a worker on your property during the construction period. You should also be certain that the contractor carries workman’s compensation insurance and liability insurance against injury or death of a worker and against damage or loss to your property or possessions. If you have any concerns about adequate coverage, discuss it with your insurance agent and consider taking out an additional policy during the construction period.

5. Monitor all liens placed against your property during construction (construction liens) by any contractor or subcontractor and ensure that they are removed when the project is finished and the contractor is paid in full. There are unscrupulous contractors who accept payment for a job and then do not remove the liens. In most of these cases, the homeowner is not aware of the lien until some time later when trying to sell the home or take out a loan for further improvements. When homeowners try to resolve the issue, the contractor claims that the bill or part of the bill was never paid and demands payment before removing the lien.

6. Never do business with someone who comes to your door offering their services.

7. Never pay a contractor the entire bill up front. Work out a payment schedule that reflects work completed, and put the payment schedule in the contract.

8. Specify the quality of workmanship and the quality of materials to be used in the remodel or addition in the contract. Not only should you specify materials quality, you should check materials to ensure compliance with the terms of the contract as they are delivered to the construction site. Insist that the costs of all building materials be specified.

9. Include all job specifications in the contract. The more specific the description of the work to be done, the more protection you have. Job specifications state exactly what work is to be done, how it is to be done, the quality of materials to be used, when it is to be complete, and that it must pass inspection.

10. Check all licenses, permits, proof of insurance, and state or local certification before you hire a contractor or subcontractor. Check to be certain the contractor has or obtains all necessary permits, licenses and certificates. Check with issuing agencies or insurance companies to confirm that insurance and licenses are current.

11. Insist that the contractor show you proof of bond coverage for the total replacement cost of the project.

12. Be sure the contract includes the appropriate information about how conflicts will be resolved, when and how the contract will be or can be terminated, and that lien releases will be provided upon payment.

13. If you give the contractor a key to your home for use during the construction period, change the locks as soon as construction is completed.

14. Take the necessary steps to protect your property and your possessions. Put away all valuables in a safe place. Define the construction area for everyone – tell your family not to enter the area during working hours; define limits of access to the rest of your home for the work crew. Protect your landscaping by covering shrubs if necessary and taking other steps to reduce accidental damage. Seal off the construction area from the rest of the house to confine dust, etc.

15. If you are remodeling an old home, make sure any work with potentially hazardous materials is done under the safest conditions and that hazardous materials are completely removed from the work site immediately and disposed of as instructed by your local government. Be sure any lead paint is properly removed; be sure any asbestos is removed and disposed of correctly; be sure old horse hair plaster (that could contain arsenic) is disposed of properly.

These tips will help you protect your family, your property and the people working on your remodeling project. Residential home improvement contractors should be very willing to cooperate on all of these points.

Claims Adjusters and Home Improvement Contractors – Getting Along Whether They Like It Or Not

Insurance adjusters and home improvement contractors are notorious for butting heads with each other. This makes sense when you consider that contractors have the homeowner’s (and their own) interests at stake while the insurance adjusters are representing the insurance company.

Still, the majority of professionals that meet each other in the field will find a way to get along. As long as neither party is overly aggressive or off putting, even if they don’t see completely eye to eye, they can at least understand that each is simply doing his job.

But this is where the other reason for a dispute comes from. Sometimes, the insurance adjuster does not wish to do his job correctly. There are times when an insurance adjuster may seem to go out of his way not to pay on a claim. He’ll refuse to act reasonably toward the contractor. In the worst case scenarios, an adjuster may even refuse to acknowledge storm damage as storm damage- completely stonewalling the claim and the repairs.

This is when even a usually mild mannered home improvement contractor may find it hard to keep his cool. It would be hard for anyone to turn his head the other way in the face of insurance behavior that is not only obviously unethical, but that also may have an affect on your bottom line.

The best thing for a contractor to do in this situation is simply defer to the homeowner. After all, it is the homeowner that is truly getting the raw deal. The homeowner is the person who pays for the insurance policy, so the fact for the homeowner is that he isn’t getting what he is paying for.

This is the last thing that a crooked adjuster wants to happen. They’d rather deal with the contractor because the contractor really has no final say in the matter. Most insurance adjusters will work happily with contractors out of common courtesy, both to the contractor and to the insured homeowner. They see the home improvement contractor as an extension of the homeowner, as they should.

Other times, an adjuster may pretend to work with the contractor and then try to bully or play games with the contractor using the fact that the adjuster is not obligated to settle with the contractor as his trump card. In this way, he placates the homeowner while acting unethically toward the homeowner’s contractor.

Certainly the contractor can argue his case, explain his estimate and try to get the adjuster to acknowledge damage. But, if the adjuster refuses to act reasonably, the best thing for a contractor to do is simply defer to the person who has the most power in the situation- the policy holder.

There was one instance when an insurance company was obviously trying to put a cork into a storm claim situation. There was a claim submitted in a community where dozens of similar claims had already been submitted and paid for (It was an obvious storm damage situation.). The insurance company had already paid on several of these claims and apparently didn’t wish to pay for them any further. Suddenly, the insurance company decided to treat a particular homeowner’s claim with extreme bias.