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Throwing good money away on inexperienced or fraudulent contractors

Posted by Scott Stueber, CPCU, CISR, AAI on Jul 19, 2022 8:10:27 AM

Throwing away money on bad contractorsWhether a contractor is hired for maintenance, renovations, or to repair damage from a covered claim, turning a home into the hands of an inexperienced

or fraudulent contractor is a homeowner’s worst nightmare. In the worst-case scenario, the result could be that significant funds are spent, the project is incomplete, AND additional damage is done to the home. Homeowners policies do have exclusions for faulty or defective workmanship. 

There are many good, diligent, talented, and qualified contractors out there. However, here’s a list of red flags that you should be aware of before hiring one.

1. The contractor doesn’t have a physical address on his estimate, bid, or card.

2. The contractor doesn’t have insurance or hold a license. WARNING: Words on a business card are not necessarily gospel. A legitimate contractor doesn’t mind if you ask for the name of his insurance agent and won’t hesitate to provide a certificate of insurance (dated timely). He’ll also give you the opportunity to check with a consumer agency such as the Better Business Bureau.

3. The contractor comes to your door without being called.

4. The contractor has requested a large down payment or asks for daily draws without doing a lot of work. This is a contractor who’s not trusted by a supplier or can’t make his employee payroll.

5. The contractor presses for an instant decision.

6. The contractor has been slow on providing a written quote. This isn’t necessarily indicative of faulty workmanship, but it bears asking, “If it takes so long to get the bid, how long will the project take?”

7. The estimate is vague.

8. The contractor leads you into larger and larger commitments.

9. The contractor doesn’t give you references to contact.

In the end, listen to your common sense. If this is for an insurance claim, it always sounds great if a contractor promises to absorb your deductible, or “hide” additional work into the estimates so the unwitting adjuster pays for it. But what does that say about the contractor’s ethics, and how does that type of practice affect YOUR job? Will they do shoddy work and cover it with fancy wrapping? Will they bring other unscrupulous workers into your home with little regard to your safety and security?

Do you have any suggestions or information you’d like to share? I’d love to hear from you. Please share them in the box below.

This article is intended for general educational and illustrative purposes only and should not be construed to communicate legal or professional advice. Further, this article is not an offer to sell insurance. Please consult with your licensed insurance agent for specific coverage details and your insurance eligibility. All policies are subject to the terms, conditions, limitations, definitions, and exclusions contained therein.

Topics: Home Safety, Home Insurance

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