Here is recipe for disaster: take one Texas hail storm, add a senior with an older home and some savings, mix in a shady home repair contractor, and season liberally with the Texas standard home insurance policy.
Home repair or contractor fraud is a frequent flier on the top 10 lists for senior financial scams. Let us take a moment and put home repair contractors, which includes roofers, in their proper place.
Home repair contractors are mere vendors.
They are not your friends, although some of them are certainly friendly.
They are not public insurance adjusters. A public insurance adjuster is someone who acts on your behalf to negotiate a claim for damage with an insurance company, and must be licensed by the Department of Insurance.
Most importantly, a public insurance adjuster cannot, legally, repair your property. Likewise, a home repair contractor cannot, legally, negotiate your claim with your insurance company.
It is not legal for a home repair contractor to promise to “work” your insurance claim for you so you can get a higher settlement, or for it to agree to pursue your “best interest for all repairs” in negotiating an insurance claim settlement. A contractor who does that violates Chapter 4102 of the Texas Insurance Code and commits a deceptive trade practice.
You should never assign your insurance claim to a home repair contractor.
You do not have to use a home repair contractor recommended to you by an insurance company. Insurance companies have been known to go with the lowest bidder, regardless of quality. Instead, get bids from three reputable contractors. You have the absolute right to control and select who completes your repairs.
Some home repair contractors will offer to pad their estimate for the insurance company and then pay you the overage. Do not agree to do that. It is insurance fraud.
Do not allow any contractor to begin work until you have received a written bid for services and materials. Be very specific about what is required – type of product, new or used, extent of services. Do not forget about requiring refuse containers and specifying where they will be placed on your property. Get written warranties from the contractor, but be aware they may be a limited use if the contractor is from out of state or has no business history.
Do not agree to a contractor’s bid until you have received written approval for the claim from your insurance company.
You have the right to obtain from your contractor a list of subcontractors and a description of materials used on the job. Do not sign anything that waives that right.
Do your research on the contractor before you accept a bid. Start with the BBB and an internet search. Check to make sure you have the correct corporate name.
Ask for written proof of the contractor’s general liability insurance and worker’s comp insurance. Insist on a criminal background check for every worker on your property.
Take the same precautions you would with any business deal. Deal only with reputable companies, remember that no one involved will place your interests about their own, and get every representation and promise in writing.
Virginia Hammerle is a Texas attorney whose practice includes estate planning, guardianship and probate. Sign up for her newsletter at firstname.lastname@example.org. Contact Hammerle Finley Law Firm to schedule a consultation at hammerle.com.
This column does not constitute legal advice.