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Choosing a contractor to repair damage to your home can be one of the most important decisions you make as a homeowner. While most contractors are honest and reputable, a few may not have your best interest at heart. Below is a list of tips you may want to consider before beginning your project.
Dan, a member of the Travelers property organization, discusses the top 10 tips to consider when selecting a contractor. Watch as he explains why choosing the right contractor is so important.
Make sure the work outlined in your adjuster's estimate is compatible with the work described in the contractor's estimate. Do both estimates outline the same scope of repairs? If you are unsure, contact your claim professional.
Be cautious of estimates that seem too high or too low. If your claim representative has not yet completed an estimate, ask him or her if the amounts in the contractor's estimate seem reasonable.
Beware of contractors who encourage you to spend a lot of money on temporary repairs. If you feel the estimate for temporary repairs is excessive, contact your claim professional.
It is easier to deal with a local contractor if problems develop. However, since it may not always be possible to work with a local contractor, make sure to thoroughly check references.
Be especially suspicious of door-to-door salespeople who make unrealistically low estimates, refuse to leave a contract overnight, or try to sell their services by playing on your emotions.
Inquire about the contractor's professional reputation by checking with their previous customers and the Better Business Bureau. Consider the quality of the contractor's products, their workmanship, and the customer service he or she will provide. Ask how long they've been in business (preferably 5 - 10 years). Find out if the contractor specializes in the work you need done.
It is a good practice to collect many business cards, interview several contractors, and request multiple bids for comparison. Make sure to read the fine print on all estimates and contracts. If you're having emergency repairs done and don't have time to thoroughly research a contractor, ask around. Neighbors, family or friends may have used an emergency services contractor with whom they had a good experience. If you're asked to pay a large sum of money up front, check with your claim professional before services are initiated to ensure the amount is appropriate and to determine how much of it will be covered.
Ask the contractor for a certificate of insurance (COI), which should provide the name of the insurance company, policy number and policy limits the contractor carries. You could contact the insurance company directly to verify information on the COI. Do not do business with a contractor who does not carry the appropriate insurance coverage. If the contractor is not insured, you may be liable for accidents that occur on your property.
Get everything in writing, and make sure the contract is clear and well written.
The contract should include:
Also, changes to the contract should be acknowledged by all parties in writing. Consider having a lawyer review the proposed contract for your protection before you sign it if the project involves substantial costs. Ask the contractor for confirmation that he or she has obtained all applicable building permits. If you decide to cancel a signed contract, you should follow the contract's cancellation clause. Written notification of the cancellation should be sent by registered mail to ensure you have proof of the cancellation.
If you decide you want to cancel your contract without penalty, check your rights under the Federal Trade Commission's rule and the laws of your state. You will need to follow any applicable rules for sending notice of your intent to cancel and do so within the specified "cooling off" period. Consider sending the notice of cancelation by registered mail to ensure you have proof of the cancellation. For more information, see
Some states prohibit a contractor from collecting more than a certain percentage of a job's cost as an initial payment. For larger projects, it is standard practice to pay 1/3 of the estimated costs as an initial payment. It is always a good idea to pay by check instead of cash because you can retain your cashed check as a receipt.
In spite of the timeline outlined in your contract, circumstances such as weather may prevent the work from remaining on schedule. Be realistic and prepare to adjust your plans accordingly.
This file should contain all papers related to the project, including the signed contract and any change orders; plans and specifications; bills and invoices; canceled checks; certificates of insurance; lien releases from subcontractors and material suppliers; a record sheet on each contractor listing the work performed; the estimated length of the job; and any letters, notes, or correspondence with the contractor.