So you sustained damage during the storms, you have filed claims with your insurance carriers, you have taken interim measures to contain further damage, where do you go from here? Here are a few items to strongly consider- while this is certainly not an exclusive list, these measures will at least get you off to the right start.
1. Contractors. Your rights will be defined by your choice of contractors and the contract documents you sign. Here are seven basic items to consider as your contract for needed repairs. First, select a reputable contractor with care using due diligence to check on reliability, creditworthiness, contractor’s insurance coverages, and quality of work. Second, ask for and check on references. Third, the work you need to be done should be clearly identified in your contract (i.e. contract “Specifications”) and should specify only new materials that should be used comparable to or that exceed those that items that are to be replaced. Estimates of start dates and completion dates should be clearly identified. Fourth, provision for “retainage” (i.e. a 10% holdback on progress payments) needs to be provided to ensure that no liens will attach to your property by materials suppliers, subcontractors, and labor. For larger jobs, you might want to insist that a pay and performance bond be furnished. Fifth, make sure the contract assigns responsibility as to who is to obtain permits. Sixth, you should consider having any potential disputes being referred to mediation and/or arbitration in order to quickly resolve claims. Seventh, confirm how the costs of reconstruction will be paid for. Will your insurance policies cover everything? Do you need to draw on savings or obtain loans to complete construction? Construction contracts and loan documents are legal documents- you may desire an attorney’s assistance in seeing to it that you are not victimized again.
2. Insurance. File claims promptly. Make sure that you meet personally with the insurance adjuster to review and discuss your claim. If you have receipts, photos, or other documents that establish what you lost and the value of these items, this will expedite a fair resolution of your claim. If you have “replacement cost” coverage, it will be necessary to repurchase the same or similar items that have been approved on your claim- you will be reimbursed by your insurance company as the claim is paid. Note however that this can create a temporary cash-flow problem as you wait for payment. If you do not replace or repair an item, you will only be reimbursed based on the depreciated value of the item(s) (“actual cash value”). Reconstruction costs should be reimbursed as progress payments for completed work become due, however, if your property is mortgaged you will need to provide that these funds are promptly released by your lender so that your contractors can be paid. In the event that your insurance company is not treating your fairly in the settlement of your claims, you may need to hire a “public appraiser” to come up with an independent assessment of damages and/or consult with an attorney in order to resolve these issues. While I know that you will be anxious to put these losses behind you, do not fall victim to an unfair settlement of your claim that will deny you the kind of restoration that you must live with thereafter!
3. Fraud. This is a vulnerable time for you and your family. In many ways, those who experience a major loss go through a kind of grieving process. There are plenty of scammers and fraudsters out there waiting to capitalize on your situation. I can’t stress too strongly to be careful and be very skeptical of any unsolicited offers you may receive. It is better to wait and to check things out than to fall victim to a crooked scheme.
4. Find Strength. Keep your health up. Don’t be consumed by your loss, but rather resolve to manage the process of recovery. Lastly, find the strength within and reach out to friends, family, and faith to keep your spirits up, your mind clear, and the ability to make correct decisions.
5. We, at Levin & Atwood, L.L.P. wish all of you a speedy and successful recovery. We are here to listen, to provide assistance, and support you. We can also assist in helping you get to appropriate resources. Please contact us if that is something that can assist.