A lot of homeowners are still scrambling to find contractors and wondering what will happen come winter when their roof, siding and windows are still damaged and their insurance company hasn’t agreed to pay for all the damage.
Here is a compilation of frequently asked questions along with answers from industry expert American Building Contractors.
Do I have to file a claim before a contractor will begin the work?
Not always. Many contractors will begin mitigation work (temporary damage repair) immediately upon signing a Subject-To Agreement, aka Contingency Agreement.
The Subject-To Agreement allows contractors to inspect your home or property for damage, determine a scope of work, meet with your insurance adjuster and designates the contractor as the one who will perform the work on your home upon your insurance claim being approved.
The Subject-To Agreement is appropriately named because it is literally subject to your insurance company’s approval. Many contractors will skip charging you anything for all of the time spent meeting with your adjuster and developing a scope of work or for any mitigation work provided if they are unsuccessful in getting your insurance company to replace what they honestly felt you are entitled to receive.
My insurer is telling me to get multiple estimates, but contractors won’t provide estimates. What am I supposed to do?
There are multiple reasons contractors will not leave behind an estimate for insurance restoration work and most are in the best interest of the homeowner.
An Insurance Restoration Contractor will pull EagleViews or Hovers (technology providers of aerial imagery and property data analytics) of a home for proper measurements of the roof and siding. The results can take up to one business day.
Next, their Estimating Department will assess the damage from the pictures and notes taken by the consultant and download a list of materials and labor into Xactimate (the same software insurance adjusters use to provide their estimates).
Finally, the Insurance Restoration Contractor will review these results with you and send it to the insurance company.
Unlike a remodeling project where contractors are up against each other on rates and values, every legitimate Insurance Restoration Contractor will repair your home and be paid from insurance proceeds.
As a homeowner, you are only responsible for paying your insurance deductible. So, you can focus on a contractor’s experience and integrity and how much trust you have in them and not the price.
Can I file a claim and get paid to replace my roof, then just do a repair?
Sure. However, the immediate gain could be minuscule in comparison to the potential financial loss.
Not having to pay the deductible or getting a big check from the insurance company for a full roof, siding or window replacement and then just having relatively inexpensive repairs done might seem practical or like a very attractive alternative. In reality it could be financially devastating because with most every insurance policy, your insurance company will know if your home has actually been repaired as they require a final invoice from the contractor who did the work.
Attempting to sell a home with a compromised roofing or siding system or damaged windows could obviously be problematic. Also, ask your insurance agent about your insurance policy and if you would have any coverage at all for an interior loss resulting from any leaks after your insurance company paid to have your home restored and you elected not to have the work performed.
Why are contractors telling us they are so far out right now, and what if anything can be done during the winter?
Four major factors play a role in the timeline after a significant event such as a derecho.
1. Availability of labor crews. Labor crews typically are stretched thin during and after storm season. Many of the local contractors are relying on local crews. It’s one thing to have someone available to get you an estimate it is another to have crews ready to do the work.
2. Insurance providers’ response time. Many homeowners have already had adjusters out to assess the damage and received an ACV check (Actual Cash Value). That ACV check is only about half of what you are entitled to receive to complete the Scope of Work your insurance provider agreed to pay so your home is restored to its original condition before the derecho. An experienced Insurance Restoration Contractor will complete the Scope of Work that includes the same quality of materials, workmanship and miscellaneous items and will bill your insurance provider (not you) for the balance of funds due.
3. Availability of materials. Prior to the derecho manufacturers were already experiencing production slow downs as a direct result of COVID-19. Now add a derecho and a hurricane to the mix and we may find some materials are on backorder for up to two months.
4. Rain makes it difficult for estimators to assess damage and will set appointments back a day. When it is time to build, rain and snow will have the same effect. An experienced Insurance Restoration Contractor will keep you informed during every phase of your project.
Come winter, siding and window projects will still be in full swing. However, roofing projects will come to a halt in most cases unless it is an emergency. Contractors are helping victims who have holes from trees falling and/or inhabitable homes first.
How can I protect myself when deciding on a contractor?
First: Always ask for proof that they are a licensed contractor in the state of Iowa
Second: There are a number of “Red Flags” to beware of when selecting a contractor:
• Asks you to sign an Assignment of Benefits contract
• Asks you to pay money at the time you sign a contract
• Asks you to pay in cash or write a check to an individual rather than the licensed company
• Wants you to pull the building permit
• Can’t provide a copy of their liability insurance policy.
• Proposal/timeline seems unrealistic (too good to be true)
Third: Check them out online. Are they A+ rated by the BBB? Do they have good or bad reviews?
Last: Select a contractor who is experienced dealing with the insurance restoration process and is fully qualified to help you through this time consuming and oftentimes complicated ordeal. Most properly licensed local roofing, siding or window contractors can do a great job of installing roofing, siding and windows. However most contractors simply aren’t accustomed to dealing with all of the complexities of the insurance restoration process. It’s like expecting your trusted family physician to do a great job of performing open heart surgery. It’s not that they aren’t a really good family doctor but it’s just not their specialty.