Basics Of Doing Construction Work When Homeowner’s Insurance Is Involved

If you are a contractor or in the construction industry, you may find yourself hired to do a job that involves repairing damage done to a home, residence or business, because of an outside occurrence, such as weather, fire, or some other problem. When that happens, you may be faced with a homeowner who likely cannot pay what it will cost to find the property.

The good news is that if the damage that you are repairing is insured, there will be insurance money to help you pay for your work on the property through a homeowner’s insurance policy.

How Will You Get Paid?

There are really two ways to get paid for your work on property when it comes to insured repairs. The first way is to do the work, wait for the homeowner to get paid from insurance, and have the homeowner pay you. The second, and usually more advisable way, is for the homeowner to assign benefits to you, so that the insurance money goes straight to you.

Which of these to choose, and the pros and cons of both, are separate topics. But whichever you choose, your primary concern is probably whether or not you will get paid.

Is the Damage-And Your Work-Insured?

The first thing to ask is whether the damage, or what you are repairing is even insured. Just because the property owner says so, doesn’t make it so. You should read the insurance policy, to at least get a preliminary idea of whether or not what you are repairing will even be covered by the policy.

Even if the damage is covered, you will need to determine how much of the damage will be covered. Generally, insurance policies have two types of coverage.

Replacement cost policies will cover exactly what it costs to replace, whatever it is you are replacing. However, Actual cash value policies will only replace what the damaged property is worth. So, if you are replacing a  10-year old roof, you (or the homeowner) will only be paid what a 10-year old roof is worth–which may be way less than the cost of the brand new roof you are putting on the home.

If insurance doesn’t pay (or doesn’t pay all of what is owed for your work) you certainly can go after the homeowner for payment–the homeowner is not “off the hook” just because insurance didn’t pay. However, liening, suing and foreclosing on a homeowner, is usually not a situation that a contractor wants to be in.

Stay in Your Lane

Lastly, remember that you are just there to do repairs. Stay away from telling a homeowner what insurance will or will not cover–even if you have experience in the area–and certainly don’t tell a homeowner what his or her legal rights are in an insurance dispute. Either of these can be considered the unlicensed practice of law, or public adjusting without a  license.

Our Fort Lauderdale construction attorneys at Sweeney Law P.A. at 954 440-3993 can help you with your construction law project, and help you get paid for the work you did, if you have trouble.

Sources:

myfloridacfo.com/division/consumers/assignmentofbenefits.htm#:~:text=Assignment%20of%20Benefits%20(AOB)%20is,the%20involvement%20of%20the%20homeowner.

policygenius.com/homeowners-insurance/home-insurance-exclusions/