Recently the Independent Insurance Agents Association of NY came out with a series of interesting tips regarding the choice of a contractor. This was in response to the destruction resulting from Hurricane Sandy and the snowstorm that followed the week after. The article was helpful and informative, however, in reviewing their suggestions, it struck me that these basic guidelines should be followed whenever you consider hiring a contractor to do any sort of work on your home or business.
1.) Make sure that your contractor is licensed. For example, home improvement contractors working in the 5 boros of New York City and its surrounding counties must be licensed by the county or the town or city where the work is to be done.
2.) Make sure that your contractor is insured with general liability, workers’ compensation and excess liability. To be sure of this, always ask for a certificate of insurance. You might also want to be named as an additional insured on his policies. The certificate must identify the insurance carriers (should be “A” rated) the dates the policies are active, as well as the limits of liability. No contractor should be insured for less than a million dollars in today’s litigious society.
3.) During times when contractors are in high demand, such as after a hurricane for example, it is in your best interest to obtain two estimates for the work to be done so that you have some idea as to whether or not the costs are in line.
4.) It is best to hire local contractors for several reasons: their reputations are important to them as there is always the “word of mouth factor” which can either make or break any business and they can usually be found if anything goes wrong.
5.) Beware of contractors who insist that you pay for the work in cash and insist on payment in advance. A portion of the money may be payable in advance to allow contractors to obtain the supplies needed to do the work, but no reputable contractor will insist that the payment be in cash.
6.) Always insist that the price of construction materials be part of the estimate. You may find that price increases after a major storm are due to the simple law of “supply and demand” as well as having to obtain supplies from further away. However, it is illegal to gouge and make profit resulting from the misfortune of others. A licensed contractor must list supply costs as part of his estimate for the purposes of being able to determine if the charges are reasonable.
Especially, at this time, an unscrupulous contractor may claim to have the approval of FEMA. Be advised that FEMA doesn’t approve or disapprove any contractor.
-Karen Skoler, CPCU