After the Storm

Home Repairs and Replacement

www.aces.edu

What Happens After a Storm

• Victims of a storm suffer some type of loss and different levels of shock.

• The news media publishes accounts of the storm damage nationwide.

• Contractors from several states away see a chance to pick up a lot of work and make money. Most will not be licensed in Alabama.

• Every scam artist will see a chance to cheat victims out of their insurance proceeds.

www.aces.edu

Don’t Become a VICTIM

www.aces.edu

Insurance Issues

• Depending on your insurance company, claims are usually handled in one or two ways:– The insurer may require several estimates.– The insurer may use its own estimators to determine

the amount of damage.• Review the claim before you cash the check.

Make sure that everything damaged is included in the claim. By cashing the check, you may be agreeing to that amount being the total settlement.

www.aces.edu

Contracting Issues

• Anyone can buy a business license from the city or county. It does not mean that he or she is a professional contractor.

• Contractors must be licensed through the Home Builders Licensure Board if they are making home repairs costing more than $10,000.

• The city or county will also require building permits before construction can begin.

• If construction costs go over a certain amount, the entire home must be brought up to code.

www.aces.edu

How to Select a Contractor

• Verify each contractor’s name, address, and phone number. Beware of pagers, PO boxes, out-of-state area codes, and motel addresses.

• Contact the Alabama Home Builders Licensure Board to verify records (1-800-304-0853); check Better Business Bureau records.

• Obtain names and phone numbers for references on similar work done by the contractor.

www.aces.edu

How to Select a Contractor

• Compare two or three bids based on the same specifications and scope of work.

• Never choose a contractor who demands payment before beginning the work.

• Remember that professionals do not solicit business by going door-to-door.

www.aces.edu

What Should You Do?

• Hire only Alabama-licensed contractors.

• Ask to see a Home Builders License Certificate and other forms of identification.

• Call to verify all information.

• Require a written contract.

• Use inspectors.

www.aces.edu

What Should You Avoid?

• Don’t rush to hire the first contractor to come along.

• Don’t sign a contract until you understand the terms and conditions.

• Don’t become a victim of construction fraud

www.aces.edu

Scam Artists Say…

• “I just finished another job in the area and I am trying to get rid of this extra material.”

• “The price I’m quoting you is very low because we plan to use your home as a demonstration model.”

• “You will have to pay me in cash since I’m giving you such a good deal.”

• “This offer is good TODAY ONLY.”• “Don’t tell anyone else about our deal.”

www.aces.edu

More Lines Used by Scam Artists

• “I’ll have to have all or most of the money up front.”

• “I’ll need some additional money to order more supplies before I can finish the job.”

• “You need to have this work done immediately. You don’t have time to think about it.”

• “The price of materials will go up tomorrow.”• “I’ve got several other jobs waiting on me.”

www.aces.edu

Protect Yourself and Your Family

• In the contract, tie the inspection approvals with any payments to the contractor. Building inspectors are there to protect YOU.

• Establish start and end dates in writing, and set dollar penalties for not meeting deadlines.

• Get all guarantees and warranties in writing.• Verify the contractor’s workers compensation

and liability insurance coverage. Make sure it is up-to-date.

www.aces.edu

Professional Advice

The information in this presentation and accompanying material is provided for educational purposes only. It is not a substitute for competent legal advice. This information is provided to help you better communicate with your professional advisrs in analyzing your specific situation.

Presentation provided by Rick Zapata, ACES Regional Extension Agent, Consumer Science and Personal Financial Management