12 tips for hiring contractors and builders

Natural disasters are stressful times, especially when your home suffers major damage.

Dealing with builders and contractors isn't always easy. But rebuilding or repairing your home can be easier with homeowners insurance. That's especially true if you're new to the area or have never undertaken a major home-repair project.

Here are some steps to help you make sure you get the quality work you pay for:

1. Do your research.

For possible accreditation and a customer complaint history, check with the Better Business Bureau.^{See note1} Also, check the state board that licenses contractors and the National Association of the Remodeling Industry.^{See note1} Another resource is Dun & Bradstreet.^{See note1} They can provide commercial data and credit history. Also, be sure to check social media comments for consumer reviews. Keep in mind that business longevity is important. If the company has been in business for less than five years, be sure to ask a lot of questions.

2. Check references from recent jobs.

Take time to interview and get to know a contractor and where the office is located. Request a point of contact. Ideally your point of contact is someone that's reasonably available and able to make decisions. Ask about “what ifs” so you understand the contractor's process for resolving problems and complaints.

3. Get license and insurance information.

Consider if your contractor has general liability insurance and workers' compensation as well as the proper insurance for that kind of business. A water mitigation or restoration company, for example, may need separate insurance for contamination like mold and asbestos. Look for industry licenses or certifications that are applicable to your state.

4. Ask about subcontractors as well.

If possible, check any subcontractors' references too. Ask about their process for background checks on employees of the principal agent and background checks on subcontractors.

5. Get a complete contract.

Be sure your contract spells out the work to be done, the costs to be billed and your rights. If there is a Direction to Pay, be sure you know what this means. Identify any waivers of liability or how interest may be charged for late payments. You may want to get a lawyer involved to ensure you understand what you're signing.

6. Have your estimates prepared in writing.

Always request a detailed and itemized estimate. That way nothing is open to interpretation.

7. Beware of change orders.

If you're replacing a product with something different, make sure there's a written change order even if the quality of the new product is comparable to the original product. If there's an upgrade, get that in writing. Ask about possible delays and if that will create changes in the project timeline. Know that your warranty may be impacted.

8. Always ask for a project timeline.

Be sure your contractor can meet your schedule. If the contractor is replacing 10 roofs at the same time, are you getting the attention your work needs? A timeline should include a projected start date and end date, and the contractor should keep you informed if the timeline changes.

9. Look into the contractor's and subcontractors' work habits.

The way they treat other jobs is likely how they will treat yours.

10. Set a payment schedule in the contract.

Depending on the size of the job, draws, or partial payments, may be necessary to purchase material and pay contractors. Make sure you have agreed ahead of time to the amount of the draws and how many are needed. Make the final payment only after the work has been completed to your satisfaction.

11. Upfront payments should be small.

Don't put yourself in a position where the contractor can walk away from an unfinished job with a pocketful of your dough.

12. Never pay in cash.

Check or credit card payments allow you to keep solid payment records.