It can be very complicated and difficult to understand the process of filing a claim and getting the repairs done on your home in a timely manner and satisfactory condition. So understanding the roles of each party who will be key players in this process is essential.
Who are the major parties involved in getting your home repaired after a loss? They are: 1) you, the homeowner, 2) your insurance company, specifically the adjuster, and 3) your contractor. Let’s break down each of these roles and what responsibilities they have.
1. Your Role as the Homeowner
Your role is pivotal to the success of getting your home restored in a timely manner and to your satisfaction. Good communication with both your insurance adjuster and your contractor is key, including returning phone calls and/or emails promptly. If prompt communication is lacking on your part, that can delay both the progress of your claim and the construction. It’s also important to understand that your insurance company has a contract with you, the homeowner, not your contractor. While the insurance adjuster and the contractor will work together to ensure that their estimates are in accord with the actual scope of work that needs to be done, the insurance adjuster will primarily be dealing with you, the homeowner.
You are responsible for payment(s) to your contractor, including your insurance deductible. Most contractors will collect this deductible at the time you sign the contract. The insurance adjuster will be sending payment(s) directly to you, in most cases. If any additional supplemental charges are needed, you will need to sign an agreement from your contractor for these charges assuming responsibility for payment. Of course, you will want to talk first with your insurance adjuster to verify that they agree with these additional charges and will be sending you payment for these approved supplemental charges.
It’s recommended to put any payment from your insurance company, meant to pay your contractor, other vendor, into a separate savings account. What we have seen happen more often than you would think is a homeowner receives the insurance checks and may use some of it to pay for bills or other expenses thinking that they will pay it back before the bill from the contractor comes. But, sometimes things happen and a homeowner doesn’t have all the funds to pay the contractor when the bill comes due. Remember, your contractor has paid out a lot of money in advance of completing the project in supplies and labor. So, review the contract you signed with your contractor on expected payments and when each installment is due and pay them on-time to assure your project will continue without delays.
Know Your Insurance Policy
That means understanding clearly what type of policy you have. What perils does it cover? Are there any exclusions? What do the coverages on my declaration page mean? For instance, ALE means additional living expenses. ALE is a part of your homeowner’s insurance that provides reimbursement for motel rooms, renting an apartment, or house while your home is unlivable. What deems your home unlivable? Typically, not having any working bathrooms and/or not having a working kitchen. It’s also important for you to keep receipts and accurate records of any expenses you incur so you can submit those to your insurance adjuster to see if any of them can and will be reimbursed. Being informed about your specific insurance coverages will help your claims process and relieve unnecessary anxieties.
2. The Role of the Adjuster
Your adjuster will be assigned by your insurance company after you file your claim. They are your key contact for your insurance company through the duration of your claim. Any questions of coverages, claim payments, estimate approvals are all answered by your claims adjuster. (If you have a personal insurance agent, they are a great resource to confirm coverage and help if you have any concerns with your claim.)
Your insurance adjuster will review the damages of your property and will provide an initial estimate of necessary repairs. This initial estimate is by no means a final estimate. Your adjuster and contractor will work together to determine the whole scope of repairs and a final agreed upon estimate. At times your adjuster’s estimate and the contractors’ may be different if they cannot come to an agreed upon final estimate. Should this happen, your contractor will speak with you as to any discrepancy and recommend how this can be resolved. This is where good communication between all three parties is essential and can keep the claims process and repairs moving along.
Your adjuster should also advise you of additional coverages you have that may be pertinent to your circumstances, like the Additional Living Expenses. However, if they don’t bring it up, don’t be shy! Ask them about this coverage, especially if your home is not in a livable state during the repair process.
Your adjuster is the one who will authorize payments for your claim process and send these payments to you. It may be one check or multiple checks.
Note: Your home should be restored to the condition it was in before the loss, you should not accept less superior products or craftsmanship. It is also important to note the homeowner is the only one who decides which contractor they will be hiring. Insurance companies cannot demand or dictate which contractor you hire. Of course, your insurance company can recommend a restoration company or contractor if you ask for that assistance. However, the final decision is yours, the homeowner, on who is hired.
3. The Role of the Contractor
In this scenario, when using the term contractor, I am speaking of a general contractor. (For the benefits of using a general contractor versus cautions of trying to be your own general contractor see below.)
While a contractor may come out and do an initial inspection and give you a rough idea of the cost of repairs, most contractors will not provide a detailed estimate of repairs until they have a signed contract. Why is that? In order to provide a detailed estimate many hours of work, even days could be required, depending on the magnitude of damage.
Once you have a signed contract with your contractor, they will do a detailed inspection of your home and may also take samples of materials used in the construction of your home before the loss to confirm the quality of materials so their estimate will include replacing with the same quality of materials. They will work up their own estimate on the scope of work that will be required to repair your home to the like condition it was in before your loss. This estimate will also include necessary permits, inspections, and/or temporary storage of your personal items if needed. The contractor will submit their estimate directly to your insurance company’s adjuster, discuss any discrepancies, and obtain final approval. Once final approval is given from your adjuster, they will provide you with a final estimate of repairs and start scheduling all trades needed to repair your home.
You will be assigned a project manager from the contractor, they will be your point of contact. They will be scheduling and overseeing all the trades working on your home. They will pull all required permits and schedule all inspections. They will confirm all material choices with you; flooring, paint colors, lighting, appliances, and so forth. Once all choices are made and you approve them, the project manager will order all materials. Your project manager will be there from start to finish. They will give you updates throughout the process. When the project is finished, they will do a walkthrough with you and once you are satisfied, they will have you sign a certificate of satisfaction. The general contractor will email your signed certificate of satisfaction to your insurance adjuster who in turn will release any remaining monies and send them to you so you can pay any remaining balance due to your contractor.
Benefits of Working With a General Contractor
They are responsible for the whole project, all repairs to your home. The general contractor will be able to guarantee all work and provide warranties for all trades. They will assign a project manager to you. While yes, a general contractor will include O&P (overhead and profit) in their final estimate to your insurance company, your insurance company will pay for the general contractor’s O&P charges, typically if three or more trades are required to repair your home. So, this should not be an out-of-pocket expense for the homeowner.
Cautions of Not Hiring a General Contractor
If you choose not to hire a general contractor, and instead decide to hire different contractors for each trade needed, it’s important to understand the challenges and your responsibilities as the homeowner. Keep in mind, this means you, the homeowner, are assuming the role of the general contractor. Each contractor performing a specific trade may not warranty or guarantee the work if another contractor will be touching that work after them. You will be the one scheduling each trade, so you need to know the order each trade will need to work, then schedule them accordingly, and be at the house to oversee they are doing what you contracted them to do. You will need to confirm each trade has completed their work, that it’s all up to code, and completed before the next trade can start. You will need to confirm all materials are received and meet specs for building codes. You will be responsible for getting all needed permits and scheduling needed inspections. If you decide to go this route it would be good to speak with your county building department for help with this process.
While this may seem a lot to take in, it is important to know the three major parties and their roles to ensure a smooth transition. Remember, both your adjuster and your contractor are here to help you! If you are unsure or have questions, ask them. Having a claim is already stressful, there’s no need to add to that stress. The purpose of this article is to identify the three major roles and to give an overview of each of those roles. It is not intended to be an exhaustive detailed list of each of those roles. As you go through the process of having your home repaired from a loss the best thing you can do is to assure good communication with both your adjuster and your contractor.
R4 Restoration is a general contractor who has years of experience working with insurance companies and homeowners in providing quality craftsmanship and exceptional customer service. Give us a call and we will be happy to assist you.