Hail season in Colorado means.....insurance claims and hiring a contractor for repairs. Please keep these tips in mind before allowing any contractor on your property!
Top 10 tips for hiring a contractor
1. Use your Claim professional's estimate as a benchmark.
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 professional 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.
2. Consider hiring local, licensed contractors whenever possible.
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.
3. Consider the contractor’s service record.
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.
4. Don’t be pressured into making an immediate decision, particularly with regard to signing a contract.
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.
5. Make sure the contractor is properly insured and bonded.
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.
6. Secure a comprehensive contract before work begins.
Get everything in writing, and make sure the contract is clear and well written.
The contract should include:
- A detailed description of the work to be completed and the price of each item.
- A payment schedule – for example: 1/2 down, 1/3 when work is partially completed, and the balance due upon completion of repairs.
- The estimated start date and completion date on larger projects.
- Any applicable guarantees, which should be written into the contract and clearly state what is guaranteed, who is responsible for the guarantee, and how long the guarantee is valid.
- Signatures from both parties. You should never sign a contract containing blank sections.
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.
7. Federal law requires a three-day "cooling off" period.
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 http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro03.shtm.
8. Don’t pay for the entire project before completion.
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.
9. Delays happen, be realistic.
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.
10. Keep a job file.
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.