The “freak storm” on the Eastern seaboard
The American Homeowners Foundation (AHF), has outlined the steps that the thousands of homeowners “whose homes were damaged by the freak June 29 storm that struck the eastern U.S.” should take.
The AHF advises homeowners to carefully document all damage with photographs in order to prove damages to insurance adjusters and the IRS if eligible for tax deductions as a result of uninsured losses. They also advise homeowners to contact their homeowners insurance company immediately to understand what is and is not covered, noting that in some cases, for example, damage from a falling tree is typically covered, but the removal of a tree in your yard without damaging a home may not be covered.
Flood coverage
Flood coverage is often misunderstood, says the AHF. “Most standard flood insurance only covers damage caused by rising waters from a river, creek, lake or pond. It doesn’t cover such things as water backups caused by overflowing drain pipes, or when the drain in a basement stairwell gets clogged with debris, causing water to fill the stairwell and come in under the basement door.”
“That once happened to me during a big storm,” said AHF President Bruce Hahn. “After I learned that the extensive damage to our finished basement was not covered by our insurance policy, I reconsidered how much I could afford to spend out of my own pocket to repair the damage.” Homeowners shouldn’t commit to expensive repairs until they learn what is covered and what isn’t, and the terms of the coverage of things that are.
Finding a qualified contractor
Finding a qualified contractor after a major event like the recent storms is another challenge, as rates tend to go up with demand, and con men abound. Homeowners can use technologies like HouseFix to check contractors’ reputations, and even avoid sticker shock by getting price ranges through Redbeacon which also allows users to take a photo of damage and get bids over their device from local contractors.
AHF advises that contractor credentials should be checked carefully, particularly their license status, and whether or not they are insured for worker’s compensation, property, and personal liability, adding that it is perfectly acceptable to ask for a copy of their insurance certificate and a list of references on similar jobs. The nonprofit asserts that belonging to trade organizations like the National Association of the Remodeling Industry, or the National Association of Home Builders Remodelers Council “is a sign of commitment to their trade and to professionalism.”
Homeowners should get a comprehensive bid, detailing as many of the specifications as possible, the AHF notes, and that homeowners should try to get two or three bids where possible. Use tools like Redbeacon mentioned previously, or MinuteBid (not a free service, completely designed for landlords, but could easily be used by consumers) to manage the bidding process, lest you be married to a fax machine.
“One of the most important suggestions is to use a comprehensive written contract,” the AHF advises. “It will greatly reduce the likelihood of disputes with your contractor. Make sure the contract covers the description of the project, timetable, payment schedule, etc., and has general provisions defining the responsibility of the contractor and the subcontractors, defects and correction, change order procedures, warranties, right to termination, and alternative dispute settlement mechanisms (since many of the costs of lawsuits are for legal fees, homeowners and contractors will almost always be better off with mediation, conciliation, and/or binding arbitration clauses should a disagreement arise). Some contractors use their own standard contract forms, but read the provisions carefully before signing them. If you feel some of the provisions in their contract are unreasonable, ask them to make reasonable modifications.”
Never hire a contractor by signing a brief proposal or worse yet, on a handshake, the nonprofit notes. You can also hire an attorney to draw up a contract that includes the aforementioned provisions to protect you. Another alternative is to use the American Homeowners Foundation’s standard six page remodeling and repair contract, which contains these protections and fill in the blank areas for the specifics of your job.
The takeaway
Do your homework, protect yourself, and document everything along the way, and this terrible storm damage situation will go as smoothly as possible and be over before you know it.
