Between Hurricanes Harvey and Irma, the cost of damage to properties in Texas and Florida could run into the hundreds of billions of dollars, easily earning the hurricanes a place among the most expensive natural disasters in U.S. history.
Texas governor Greg Abbott has told media outlets that damage in Texas could reach up to $180 billion alone. A report by catastrophe modeling firm AIR estimates that damage to the U.S. caused by wind and storm surges from Hurricane Irma could total as much as $50 billion.
After hurricanes hit, contractors swing into action to rebuild and renovate battered homes and businesses.
Many outstanding contractors will do quality work in an efficient manner, but there are also plenty of bad actors in the industry who will take your money, and in some cases, leave your home in worse condition.
Home improvement and construction complaints are No. 2 in the list of Top Ten consumer complaints in 2016, according to the annual consumer agency survey conducted by Consumer Federation of America (CFA) and the North American Consumer Protection Investigators.
Here are a four ways to hire a dependable contractor when you need to get your home back in order.
1. Go local
Mark Berding, who for 32 years has owned and operated Berding Construction in Athens, Ga., suggests choosing a contractor who is local to your area and can easily be vetted.
“Look for somebody with a local reputation, somebody you can easily check up on,” Berding says. “An established local contractor is your best bet.”
The best way to find a local contractor is to ask for referrals. If friends and family don’t have any referrals, try contacting your local hardware store or lumberyard to see if they can refer you to a solid contractor. Ask them specifically for a contractor who consistently delivers what they promise and has a good reputation.
A face-to-face meeting with your contractor is also a must and is much more easily executed if he or she lives in your area.
An added benefit to staying local is that if your project requires a permit, a local contractor also may be more familiar with the permitting process in your city or county compared to someone who isn’t from the area.
2. Make sure their credentials are sound
Look for contractors who work with or run companies that are part of industry groups, such as the National Association of Home Builders (NAHB) or National Association of the Remodeling Industry (NARI).
Make sure the contractor is licensed and insured. Not every state requires licensing, but the NAHB says if you are in a state that requires licensing, the contractor should be able to provide a copy. You also can check licenses on your secretary of state’s website.
In addition to investigating a contractor’s license and insurance (they should have personal liability, worker’s compensation, and property damage coverage, according to the Federal Trade Commission), learn more about your contractor. The FTC suggests that you ask for copies of current insurance certificates. If they don’t have proper coverage, you could be held liable for any injuries and damages that occur during the project.
3. Look for a history of complaints
Use sites such as Angie’s List, Craigslist and Yelp to find more information, but don’t solely rely on those recommendations. Contact your Better Business Bureau or your state’s consumer protection agency to learn if complaints have been filed against the company.
That way, you’ll have a better chance of avoiding shoddy work or hiring a contractor who fails to start or complete the job, which are the biggest complaints in the annual survey of 39 state and local consumer protection agencies from 23 states.
Your insurer may provide one of its approved contractors, and although you can get a property damage estimate from them, you are not obligated to use them, according to the CFA.
4. Don’t get duped by a low estimate
If you put your work out for bid, don’t just select the contractor who offers the lowest bid. They may offer a low bid but add on extra fees or costs down the line that can easily make their work more expensive than anticipated. A low bid can also be an indication that a contractor might be willing to cut corners simply to lower their prices and secure a job.
“When I was starting out, I was always getting beat by other people on bids,” says Berding, who has three decades of experience in construction. “I found out later that low bidders usually had quite a few add-ons at the end, so they would turn out to be way higher.”
And while on the subject of bidding, ask the candidates for an itemized bid, breaking the project down so you are aware of where your money is going.
Tips to spot a contractor scam
If a contractor asks you to sign an “estimate” or “authorization,” be cautious. Some shady contractors will ask for a signature before you’ve even officially agreed to hire them, and you may unwittingly sign a binding contract to hire and pay them without realizing it.
Also beware of contractors who demand cash in full before starting the job. While it is common for a contractor to ask a homeowner for a deposit to pay for materials they’ll need for the project, you should only do so after you’ve agreed and signed a contract, the NAHB warns. They shouldn’t ask for the entire project fee upfront before any work has been completed.
Starting with the moment a contractor submits a bid for work, make sure you get everything in writing. If a contractor doesn’t want to put their bid or project estimates in writing, move on to the next one on your list.
When interviewing a contractor, the FTC suggests asking these three questions:
- How many projects like mine have you completed in the last year? (Then ask for a list of the projects.)
- Will my project require a permit? If the contractor says that you’ll need to get the permit, avoid them because it is a sign they are not legitimate. Professional contractors should obtain the needed permits from city, county or state offices, according to the NAHB.
- May I have a list of references? That way you can ask clients if the project was completed on time and to their satisfaction.
MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.
