Q: Our house caught fire at the end of last month. The fire marshal condemned our home. We got what we could out of the home and are trying to get back into our normal daily routine.
We plan to have our home rebuilt. Our insurance representative explained to us our policy and about using their preferred contractors. We have met with one such contractor and they seem good and we have references from them to call.
Do you have an opinion on this program? Although our initial impression of their preferred contractor is positive, we can’t find much consumer information on this online and think the opinion of a disinterested party would be wise before we sign up.
A: We’re sorry to hear about your unfortunate event of last month. How fortunate that nobody was hurt or injured in the fire.
Working with insurance companies on fire losses can be a tricky situation, because if you aren’t savvy about how you navigate the landscape, you could wind up with less money to rebuild your home.
Some insurance companies are better than others. If you have a recommendation for a contractor from the insurance company, you should use every means within your disposal to investigate them. You might try the Better Business Bureau, your local city call buildings’ department and any people that they have referred you to. Just make sure that you are being referred to clients they most recently assisted and not people they helped out five years ago.
You should also make sure that the company is properly licensed in your state and carries the right amount of insurance
The reputation of your insurance company in your area is also important. If your insurance company has a good reputation for assisting homeowners in your situation, you might be in better shape than if your insurance company doesn’t deal well with homeowners.
Before you accept any settlement to rebuild your home, make sure you have an independent architect or qualified home builder review the plans and specifications with you. You are building a new home. You need to know what will be included in the pricetag and what you’ll have to pay for outside of the insurance proceeds. Your perception of the end product may be quite different from what your insurance company and their contractors believe should be the end result.
There are experts out there that can help you go through the process and you might well want to find one to help you out. You also need to understand the terms of your insurance policy before you sign on the dotted line. You need to know what responsibility your insurance company will have to rebuild your home, to what extent and with what finishes.
Some insurance policies will limit the extent that a home will be rebuilt. Some of these limits may arise due to the age of a home. If a home was built 100 years ago, the home now built may require differences in construction materials, layouts and other life and safety improvements. All of these changes may cost more money and you need to know whether your policy will cover all of these changes before you start reconstruction of the home.
Once you know more and understand what you are getting, you’ll have a better idea if the contractor will act on your side or if the contractor is trying to meet the budget set by the insurance company. Your insurance company’s budget may not be good enough for you and you may need to get other estimates to make sure that the home is built as you would have expected.
Good luck and keep us posted.