Tips for Hiring a Contractor After a Disaster

After a disaster, you may need to select a contractor to make repairs. In some cases, your insurance adjuster may recommend one or even bring one in to provide estimates and/or agree on the scope and cost of repairs. Some insurance companies have providers they like to use on a regular basis and some even have more formal preferred provider programs where certain contractors will be regularly referred.

Keep in mind that just because an adjuster recommends a provider or contractor does not necessarily mean that the company is the best choice. Once again, selecting the right contractor to work on your home, especially after a disaster, is a crucial decision that requires time to do your homework before signing any contract.

Potential benefits of hiring a “preferred contractor”:

1. Contractors recommended by insurance companies may have a certain level of accountability for their performance. The idea here is that the contractor can get a lot of business from the insurance company and it is in the best interest of the contractors that you are a happy customer so they can continue to be recommended.
2. In some cases, preferred contractor programs may offer extended warranties on preferred contractor work. However, a warranty is only valid while the contractor is in business, unless the insurance company agrees in writing to support the contractor’s work, even if they go out of business.
3. Some preferred contractors can handle the full scope of restoration, rather than just structural repairs. Some preferred contractors can handle everything from emergency services to personal property handling and/or cleaning, personal property storage, structural drying or deodorizing, and structural repairs.
4. Some preferred contractor programs require their vendors to work to approved estimating guidelines and price lists. This can help keep restoration or repair costs more clearly defined and possibly lower.
5. If the preferred contractor has been working for the insurance company for a considerable period of time, this may be an indication of stability and a history of good service to their clients.

As with the selection of any contractor, the 7 tips listed in this article series should be considered before hiring any contractor, preferred or otherwise.

Concerns regarding hiring a “preferred contractor”:

• Some preferred contractors can be very reluctant to oppose an adjuster’s opinion or stand behind an owner when it comes to an issue of an item that needs to be replaced rather than cleaned, patched or repaired. In this type of situation, a preferred contractor may fear losing favor with the insurance company and may be unwilling to take a position on what should be done, regardless of the adjusters’ opinion on the matter. Or they may agree with the adjuster up front until they get the job to do the job, only to change their mind.
• If the preferred contractor is not in a formal approved vendor program, but simply a friend or acquaintance of the adjuster, you may not get any real benefit from using another contractor of equal or higher qualifications. The danger here is that there may be a false sense of security created for the homeowner by the preferred contractor simply because he or she was invited by the adjuster.
• In most cases, insurance adjusters are required to write their own estimates. Insurance adjusters are generally not licensed general contractors and do not have knowledge or hands-on experience in building or repairing damaged property. If the adjuster has a preferred contractor with them, they may try to come up with an agreed cost or scope of work using that contractor as their “expert” to expedite the claim. While most adjusters try to be as thorough and accurate as possible, you should always get more than one opinion on the extent and cost of repairs. If for any reason the adjuster underestimates the costs or scope of work, he may not be able to perform the quality repairs he expects. Also, if the preferred contractor’s appraiser is inexperienced with the type of work that needs to be done, he or she could be caught in a situation where the blind lead the blind.
• Just because a contractor may be in a preferred vendor program, they still run some of the same risks using them as any other non-preferred or independent contractor. This includes the risk of going out of business, doing shoddy work, causing construction defects, not showing up, not paying subcontractors, and a host of other less than favorable issues. Ultimately, it is your choice which company you will work at home for. If you decide to use a preferred contractor to do the job and they don’t, you may not have any recourse with the adjuster or insurance company that recommended them.

In my opinion, a homeowner should always get at least three quotes from qualified contractors before agreeing on the cost and scope of work. Two of these estimates must be from independent contractors. Once you have a check in hand to start the job, and you’ve thoroughly vetted the contractors being considered, select the contractor you feel is the best fit to work with you.