Should the contractor get the entire payout?

[Jim Brozny]

I filed a claim with my insurance company for wind damage to the siding on one of my properties.  At the last minute, I called a contractor to meet the adjustor at the property so they could inspect it together.  The contractor said he would do it as long as I gave him the job.  I agreed. 

Because I did not get any estimates prior to the adjuster visiting the property, I really don't have a good idea about what the job really costs.  I only know what the insurance company is paying me.  They are paying a healthy amount to replace the siding, gutters, and downspouts for the entire property.

My question to all of you, would you pay the contractor the entire amount the insurance company is paying me or would you negotiate?

Thanks!

[Curtis J.]

@Jim Brozny Do not sign anything with the contractor yet.   There are a ton of contractors who prey on insurance claims and make huge profits while you suffer with crappy work.  I'm biased towards this since I live in the SW where contractors constantly rip off unsespecting folks when hail storms roll in.  Due to seeing these guys rip people off all the time I have a deep down hatred for them that is rivaled by little else.  

I'm a licensced contractor in the state of NM, so my experience is here.  Although I'd assume its not much different there.

An insurance claim will normally cover damage minus depreciation, normally.  Meaning 10k damage will get you an 8k check minus your deductable, assuming 20% depreciation.  After all is fixed and you show a bill fo 10k you get the remaining 2k.

The adjustment should be a line item adjustment showing, material, labor, profit, and overhead.  Make sure what the contractor is doing matches this.  Do not settle for sub par material, this is where many will rip you off.  If the adjustment state cement siding, put cement siding.  If you have questions about a substitute contact your insurance company.  If they pay for x and you put b up they may not cover it.  

One thing the scammers in my AO will do is have you sign a contract before the adjustment is done.  This contract states that the company will do the work if the adjustment is approved, and enough for them to make a ton of money.  You sign this and then on the back in grey, gross example on my part, is a clause that you will give them 10-20% of your total insurance check if you back out.

One thing you may be able to do, depending on how big the claim is, is get them to do some other work around the property.  For instance when replacing a roof, it wouldn't be uncommen to get a contractor to throw in some free stucco repair or other misc repairs that are wear and tear items.  It never hurts to ask.   

Be sure and get references, from people who have experience.  The elderly neighbor who he called mam, but has no idea what a good contractor does is a crappy reference.  Look at their social media, some of them are dumb enough to have their employees leave reviews, avoid them too.

I hope this was more informative and less of a rant.  We've had a ton of contractors screwing people overe lately and it irks me to none other.