So many Contractors, so little time - How to pick a good contractor and why?

A great contractor is one that provides outstanding workmanship for the price point, provides excellent communication throughout the project, maintains a clean and organized work area, and will stand behind their work for years to come.  

When it comes to claims related construction, often referred to as restoration, they need to aggressively be your partner in advocating for the money needed to do the project with quality materials and tradespeople.  Specifically, they need to know how insurance companies price all aspects of the project and price it to maximize the settlement for you. Finding a contractor matching this description is your goal.

Why does choosing a good contractor matter to a public insurance adjuster? 

The simple answer is that the contractor’s work is the result of the efforts of a good quality public insurance adjuster. Reliance can do a great job getting you a settlement, but if you use that money on a poor Restoration Contractor to repair the property, the result of a great settlement can still be a disaster. It’s important that you pick both the Public Adjuster and Restoration Contractor correctly.

Choosing a restoration contractor is slightly different than if you were interviewing an everyday remodeling contractor, because price is thrown out of the equation. Keep in mind that you’re not writing the check, the insurance company is.  You need a contractor that is going to partner with you and your Public Adjuster in justifying all the costs. Once the money is there from the insurance company, then absolute quality should be your primary concern.

Understanding How Quality Works 

All contractors will claim great quality, but here’s the dirty (and obvious) little secret about those claims… Quality is more expensive!  Quality will be dictated by the size of the insurance settlement in relation to the amount of work required.  To put it another way, if there’s not enough money, quality will suffer.

With Reliance, one of our biggest advantages over our competition is our unmatched experience in legally and ethically increasing the claim settlement through attention to detail.  Our experience as claims adjusters and 10+ years in restoration construction means we know the ‘paperwork’ side of restoration as well as or better than the insurance company.  We will go over your settlement from a construction standpoint, going into more detail in the estimate/scope of work, squeezing out every dollar possible.  Those dollars add up and by the end of the settlement process this thoroughness often adds up to a 30-50% higher settlement… More money and therefore more room for quality when building back your structure.

When choosing a contractor, always ask about their quality. What they won’t talk about (but it’s always there) is the goal to make a profit while providing quality.  If they can’t specifically prove to you how they can legitimately increase the size of the insurance claim, then there are only two choices.  You can either assume they are willing to lower their percentage of profit (profit margin) OR the level of quality to meet the budget set by the lower settlement…  It’s easy to assume which of these is chosen more often.

Researching and verifying you have the best restoration contractor for your insurance dollars requires a little work but can really add to your peace of mind.  Nothing is guaranteed in life, but if you follow these easy tips, you can be a lot surer you've found a good one. 

1. Independent:  Identify contractors who are independent of the insurance companies.  If they get most of their work through referrals from the insurance companies, are they truly working for you or are they more interested in getting their next lucrative referral?  Stay with independent restoration contractors and you'll get a professional only working for you, not you and indirectly the insurance company.
2. Licensed:  Check that your possible selection has a General Contractors License.  Checking with the CSLB (Contractors State License Board) http://www.cslb.ca.gov/ can verify license in CA. In TX, it’s https://texas.uhire.com and in other states simply Google “Check a contractor’s license”.  When checking the status of the license also look for the age of the license and ensure there are no restrictions or administrative proceedings against that company.  The age of a license is very important because a company that has built a reputation of 20-30 years is far less likely to risk a clean reputation for cutting a corner. In contrast, a relatively new company that might make a big mistake can simply shut their doors and re-open under a new license because they don’t have that much to lose since there’s no significant history to protect. 
3. The Reviews - BBB, Yelp, Google & Angie’s List:  All of these sites provide customer reviews of past work done by the contractor. A word of caution here, companies that pay money and advertise through BBB, Yelp, Google etc. can often have negative reviews become less available and these search/marketing companies will highlight their paid advertisers to people searching, regardless of the negativity. 
4. Worker’s Comp:  Verify that the contractor you are considering has valid Workers Compensation Insurance.  A contractor with a poor safety record will pay significantly higher premiums.  That problem could translate into significantly more money not going back into your home because a contractor must pay higher overhead costs.
5. Court Action:  The most important and least utilized step is to check with your local superior court. You want to look out for companies that file a high number of Mechanic's Liens against property owners or have been sued repeatedly by their customers.  There should be very little need for Mechanic's Liens when the insurance company is paying the bills... Surprisingly, we’ve found that many of the contractors with the most mechanic’s liens are often the “Preferred” or “Select” contractors, those recommended by the insurance companies.
6. When looking up contractors at the county superior court websites understand that these will be civil cases and it could be listed under a person’s name, a corporation name or a business name.  We recommend you follow step #2 as looking at the license will show you who actually owns the company; you can then search by business name and by last name. As an example, for San Diego County civil court searches: http://courtindex.sdcourt.ca.gov/CISPublic/namesearch.
7. Bonded/Liability Insurance:  Ensure that the contractor you are considering has the bond and Insurance needed to protect you while doing the work on your property.  To be licensed in the state, contractors have to meet minimal insurance and bonding requirements.  Verify that those are still in force and that they meet characteristics of your fire restoration needs (at least $1,000,000)
8. References:  Get and check references.  Require that your prospective contractor provide references within the last year.  If a contractor has to dig back 2-3 years to find 5-6 names for you that would give positive feedback there’s probably something wrong.  This should not be a challenge for a contractor working some volume and providing good customer service and workmanship.

Know your insurance rights; don't get pushed into a poor decision.  Far too often, in the claims process an insurance company can be extensively more concerned with saving money versus doing right by the policy holder.  Multi-billion-dollar insurance corporations can pay out on thousands of claims per year; their adjusters have to be very motivated to control costs and bringing in their own contractor is one of the primary ways of doing this. Because there have been prior cases of collusion between insurance companies and "preferred contractors,” the State of California has very specific laws regarding who decides who is employed to repair the damage in a property insurance claim.  Only the building owner has a say in who repairs the structure in an insurance claim.  This is YOUR property!!!

As an example, The California Fair Claim Practices Act clearly states in Section 2695.9(b):  "No insurer shall require that the insured have the property repaired by a specific individual or entity.

To ensure Insurance companies don't get overly involved in the contractor selection process with the Insured the act continues with Section 2695.9(c):  "No insurer shall suggest to recommend that the insured have the property repaired by a specific individual or entity unless:  (1) The referral is expressly requested by the claimant; or (2) The Claimant has been informed in Writing of the right to select a repair individual or entity."

Conclusion

Knowing your rights and how to identify good contractors will help you avoid some huge pitfalls in getting your property restored quickly and to even better condition. Making well researched and non-emotional business-related decisions can considerably help you make the very best of what looked to be a bad event.  A great public adjusting firm such as Reliance can help with most of your insurance challenges, but it’s in conjunction with good quality contractor that this “team” can get you across the finish line.