Home repairs, renovations, and remodeling are pricey, and finding someone to do the job within your budget can be challenging. However, cutting corners when hiring a contractor can cost you more than your potential savings. Shady contractors often take advantage of regions recovering from hurricanes or suffering from price inflation to cash in on substandard or incomplete work. While most contractors work in good faith, you should learn what it takes to avoid falling victim to contractor fraud for the sake of your wallet.
Red Flags When Hiring a Contractor
Contractor fraud is when contractors offer services that intentionally mislead home or property owners. This can include performing inadequate home repairs or charging more than is necessary. Seeing as this type of fraud can lead to additional repairs and even endanger the inhabitants, it’s important to keep an eye out for these warning signs:
- Require Upfront Payment: Contractors may require some money upfront, but if you offer them full payment, they have little incentive to return to resolve any safety concerns or issues with code compliance.
- Offers to Pay Your Deductible: If it sounds too good to be true, it probably is. An offer to pay your homeowners insurance deductible in the event of repair failure can be considered illegal and is usually a sign of an unscrupulous contractor.
- Accepts Cash Only: This is a common red flag amongst most professions. You always want a paper trail in the event a contractor tries to swindle you.
- No Insurance or Licensing: Make sure the contractor has a general contractors license and provides proof of liability insurance and workers compensation. Your homeowners insurance isn’t likely to cover injuries to hired contractors on your property.
It’s also important that the contractor obtains the property building permits. A contractor that requires you to gather the permits shouldn’t be trusted.
Warning Signs When a Contractor is on the Job
If you’ve already hired a contractor for your home repair or renovation but want to cover your bases, there are a few red flags you can look out for while the work is being performed:
- Subcontractor Calls: If a subcontractor personally reaches out to you to cover payment for the work completed, it could be a sign of contractor fraud.
- Lack of Progress: If the contractor isn’t getting any work done during peak working hours or has poor communication, he could be taking on too many jobs at once.
- Unexpected Expenses: While it’s not uncommon to have unexpected setbacks, frequent or very expensive mishaps are suspicious. You can reach out to a home inspector to gather a second opinion if you’re curious.
If the contractor is also working with shoddy equipment and tools or low-grade materials – especially if different than what’s listed on the estimate – this should raise concern.
Protecting Yourself from Contractor Fraud
Whether hiring a contractor to repair storm damage or build an addition, make sure you gather several quotes from reputable businesses and seek references from previous clients. You may be eager to get the work done, but it’s important to take your time to find the right contractor. Also, insist on a contract and written estimates. This will be helpful in the event you need to pursue legal action over substandard work or require the right amount of insurance compensation if you’re performing a repair through a homeowners claim.
Keeping an eye out for these red flags is essential to avoiding contractor fraud. While it requires that you take a bit more time than you’d like, it can protect you from the financial repercussions and potential hazards of hiring the wrong contractor. At TJ Woods Insurance, we’ll ensure you receive the appropriate amount to cover repairs by matching you with the right homeowners insurance. If you require insurance to keep you protected from any home-damaging setbacks, contact us today.
