I’m looking for advice/stories on dealing with general contractors for home remodeling when insurance is involved. Long story to follow.
We recently had a minor kitchen fire at our house. The repair work includes removal of acoustic “popcorn” ceiling, replacement of appliances, replacement of carpeting in adjacent rooms, painting several rooms, and replacement of kitchen cabinets.
We also are taking the opportunity to do some upgrades on our own dime, including switching from carpeting to hardwood and extending the popcorn removal to additional rooms. We are fairly competent DIYers but want to leave most of the work to the pros since there’s so much to be done, and I already am in the middle of remodeling a bathroom. We would like to do the wall painting ourselves to save money (the quoted amount from the insurance adjuster seemed very high.)
The adjuster recommended hiring a general contractor to coordinate the work. The first one we brought in scoped out the job, but doesn’t want to let us do the painting—his reasoning is that painting is a high-profit area for him and he doesn’t want to give it up, which is fine for him, but his profit is not our priority. He also said that he can’t guarantee removal of smoke smell if we do the painting—a fair enough argument, but the smoke smell is already gone and our concern about that is low. We have already had professional cleaners come through.
So now we are asking ourselves if there is any point in having a general contractor. Would it be better to just find separate contractors for the ceiling, flooring, cabinets, etc.? Should we look at it like we have a pot of money from the insurance company based on the full cost of repair, and can do whatever we want to get the work done in a cost-effective way, i.e., doing the painting ourselves and looking for sales on appliances?
Please share any experiences you’ve had in this area!
When I had to hire a GC to replace my roof and fence (damaged in a storm), I interviewed four of them. For each of them, I handed him the insurance statement, and asked them what’s your experience with handling insurance companies and banks? 3 of them hemmed and hawed, the other ran through my carrier and his experiences, my bank and his experiences, and even my agent, and his experiences with them.
I told each of them “the insurance company gave me this check to fix this stuff with it, so fix it. If you need extra money, you can get it after the divorce… or from the insurance company in supplemental claims. I strongly suggest the insurance company.” Again, one of the guys understood and took me through some possible supplemental claims that he saw, the others just nodded.
I hired the guy who knew the industry, and not just the trade, he had everything done in 3 days, filed $2k worth of supplemental claims that he and his team identified/got approved/fixed a couple of items that weren’t on the original adjustment, he got his check, I got everything done and more, I didn’t have to lift a finger, we were both happy.
I didn’t end up with any extra money, but I got a lot done to my house with $0 out of pocket, it was convenient as hell, and I am quite happy with how it worked out. But, again, my goal was to find a GC who knew how to shake more money out of the insurance carrier, and not just install a roof.
Do you want to chase after multiple contractors to make sure you jobs are done right or just one? Most general contractors don’t do everything themselves, especially with the mix of things you’ve listed that needs to be done. Since this sounds like a multiple thousand, even multiple 10’s of thousands of $$$$ job, there will likely be retention with subcontractors to ensure everything is done correctly. Since it’s a “You don’t get final payment until I get final payment”, the general contractor has a big rope tied around the subs.
Insurance is intended to make you whole, not have you profit off the claim. Check with your company what the requirements of the claim are. They may require you submit receipts of what you paid and if you DIY the painting, you may just be reimbursed for materials. Same with shopping for your own appliances.
Also, if you have a mortgage, the lending institution may require expert work be done for the repairs. Somewhere in your agreement is likely a clause that requires you to maintain your house in the same or better condition than what it was when you set it up. This is to ensure if they have to call back the loan, they’ll receive the max return on their loan.
Bottom line, there’s times to leave it to the pros and this is one of them.
If you find additional damage that the adjuster missed, do you know how to file a supplemental claim?
If you found damage that probably wasn’t part of the original… but could be argued that it was… can you make that case, convincingly, to your insurer?
There may be an item on your statement about “recoverable depreciation”… do you know how to get those funds?
If your mortgage/insurance company sends an inspector and she sends back a report with some deficiencies that still need to be corrected, what happens then?
Will each of your subcontractors agree to make you whole for no more than the stated amount in the insurance statement, even if it means coming back and correcting issues found in the above question?
… If you know the answers to these and similar questions (and they’re positive answers!), by all means, go ahead and DIY it. I personally wouldn’t - since there’s an insurance company and a mortgagor involved in my home, I always GC insurance-related repairs.
And… as a general rule… I don’t really complain about how people get paid when they do work for me. This is America. It’s expensive. Pay the guy and stop worrying about whether or not he’s making “too much” money for a task, especially when the money isn’t even coming out of your pocket. :rolleyes:
These are some great reminders and points to think about-- thanks. We’re leaning towards using a GC for the sake of convenience and going about the repairs in a coordinated way. It’s mainly the painting that had us wondering about limiting the scope of the GC’s work. We’ve only had one GC look at the job so far, so we still need to talk to a couple of other candidates. There is still an outstanding question about whether the cabinets can be repaired-- and if a couple of them can’t be repaired, it might require replacing all the cabinets in the kitchen, so there’s potentially a lot of money involved.
Good point about checking with the insurer to see if the payout changes if we do the painting/appliances ourselves-- I’ll have to look into that. My current understanding is that they pay us based on their estimate of the cost of repair/restoration, then we pay contractors as we see fit. If the contractor discovers more damages, we have to make the case to the insurer that a higher payout is warranted. There is a depreciation holdback where a percentage of the payout is held back until work is completed-- this is to ensure that we use the money for its intended purpose. If we painted the walls on our own, we wouldn’t get that holdback for the painting work, but we would still end up ahead.
“This is America. It’s expensive.” I do need to remind myself of that! I’m so used to estimating the cost of home projects based on the cost of materials that I’m experiencing sticker shock when I see the cost of paying people do to the work.
I highly recommend a professional for the painting. A professional cleaner is not a professional painter and the pro painter will have cleaning/prep techniques to ensure the new paint adheres correctly to the damaged surface. Smoke likely permeates more than the surface of the paint which the pro cleaner is most concerned about and possibly into the material under the paint. If you DIY the painting, your paint may peel or the smoke smell may come back like a painted over stain that works it way through the cover paint.
Again, the insurance company’s goal is to make you whole and their estimate is based on an extensive knowledge base on what it would cost to do that. Yes, sometimes they underestimate, but that’s where you provide documentation for a general or sub-contractor.
If you have a mortgage, you might want to contact them to see what verification they require in order to release funds for the repair. They will be named as a co-payee of the dwelling settlement check. Some mortgagees make a physical inspection prior to releasing funds and other accept paperwork.
I’m so used to estimating the cost of home projects based on the cost of materials that I’m experiencing sticker shock when I see the cost of paying people do to the work.