The recent tornados in the Twin Cities area announced the arrival of the Minnesota severe weather season very loudly. The storms that have occurred to date have caused significant damage in or around the Twin Cities area and putting homeowners' in very difficult circumstances. The damage to those homes will require significant repairs in order to get the homes back in a livable condition.
These incidences of severe storm damage provide an opportunity to remind homeowners' of the need to take appropriate steps in working with insurers, contractors, and others involved in completing repairs to homes. Each and every homeowner should ensure that they complete "due diligence" in order to obtain appropriate compensation for repairing the damage as well as having the repairs done by a reputable licensed contractor with appropriate experience, credentials, etc.
In most instances, a homeowner will be able to obtain sufficient recovery from his or her homeowners' insurance carrier to repair the damages as needed. However, they may be occasions where there is a dispute between the homeowner and the insurance carrier regarding the scope of the necessary repairs and/or the costs of completing such repairs. If such a situation occurs, a homeowner does have rights under the insurance policy to ensure that proper coverage and compensation are provided where those issues are in dispute, a process known as "appraisal." This process of making a claim under a policy of that nature can be difficult and complicated. A number of steps and procedures are necessary to utilize that right under the policy and assistance from someone knowledgeable with these types of "first party" insurance claims can be the difference between full recovery and something less.
In addition, retaining the services of a contractor to complete the necessary repairs can be a process fraught with difficulties. A homeowner should ensure that appropriate steps are taken to complete due diligence on any repair contractor prior to hiring one to complete storm damage related repairs. First and foremost, as the most basic step a homeowner should ensure that any contractor who is going to complete repairs holds a valid and current Minnesota contractor's license. Any contractor in the State of Minnesota completing work related to storm damage repairs is required to hold a contractor's license in order to do so. A homeowner should ensure that the contractor holds such license and it is up to date and verify it with the State of Minnesota Department of Labor & Industry.
A homeowner should also ensure that the repair contractor holds appropriate liability and other insurance. In order to obtain a Minnesota contractor's license, a repair contractor will be required to establish that it holds its all appropriate insurance coverage(s) for the work to be done. However, it is in a homeowners' best interest to request copies of a contractor's insurance coverage and take additional steps to ensure such steps that if that contractor will be completing work on the home, the homeowner will be protected in the event there is an issue with completing that work.
Lastly, homeowners should be aware that storm repair contractors are not "private insurance adjusters" and contractors should not be offering to negotiate with the insurance company directly on a homeowners' behalf. In fact, the State of Minnesota previously issued a bulletin indicating that repair contractors are prohibited from negotiating insurance coverage issues on behalf of homeowners. Contractors can negotiate their own contracts relating to the scope of the work and the price for such work, but should not offer to "exclusively negotiate" with an insurer on behalf of a homeowner. A contractor may be present at inspections where an insurance adjuster visits the property, may recommend the filing of an insurance claim, offer an opinion as to whether damage to the home has been caused by a storm, may provide an estimate of repair which the homeowner can submit to its insurer and may answer questions raised by an insurance adjuster relating to that estimate. Any contractor that offers to (or does) handle insurance negotiations for a homeowner directly with the insurance company may be in violation of Minnesota law and is an indication of the potential for future problems.
Certainly, having a home severely damaged by a storm is a significant event in and of itself. The process of obtaining money to repair the home and completing those repairs can be daunting, but if a homeowner is aware of some of the above concerns and makes sure to complete due diligence through the process, it will make a difficult situation easier to go through.
Hellmuth & Johnson's Homeowner Property Insurance Claims practice group can assist property owners in ensuring that they receive proper coverage and payment for insurable losses under their policies. Please contact our office with any questions on these types of issues.