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Tips for Disaster Survivors

The website www.contractorsfromhell.com have some tips for people thinking of building a house as “Owner/Builder”

http://www.contractorsfromhell.com/?p=10

You should know that we know of at least one instance where the “Workers Comp Police” [for lack of a better term] followed supplies from a store to a property and fined the homeowner tens of thousands of dollars in fines. This is a new development that the author did not know about when writing the article.

 

After our loss in the 2003 fires, Lori Delgado with Escrow Funding Services came to our fire recovery meetings to speak about working with contractors. One piece of advice that stuck with me was signing a fixed price contract as opposed to a time and material or other such open ended contract.

What this means is that you determine the price of your house BEFORE you start building. If it takes more to build the exact house agreed upon, then the contractor has to eat the cost. If it costs less then he gets to keep the money. One caveat is that if you go about setting up this kind of contract, your budget could be completely blown with change orders so be sure you have an architect go through your plans carefully to be sure the details are all there to complete the house with as few surprises as possible.

There are two general places where the contractor can cheap out on you. The first thing is the quality of the “bones” of your house or the construction materials. If you want a house with high quality construction it MUST be laid out in your plans.

The second place they can cut costs is with the finishes. Way too many people I talk to aren’t even asked about these things until they’re about to be installed! For example your contractor might’ve bid your kitchen based on cheap cabinets with laminate tops. If you want high quality wood cabinets with granite, you might be in for a rude $50,000 awakening.

Both of these types of details need to be hammered out IN WRITING before you start construction. The set of plans we created [link for reference only, the codes have changed significantly] for the modest 1400sf house included pages of drawings many of which were not required by the building department. We also had a 15 page document that detailed everything else in the house we could think of. (I must admit, though, that even this is not inclusive. We still had to pick out the doorbell and electrical fixtures among other things).

This came in EXTREMELY handy when problems arose. For example, on our electrical plans (which were not required by the building department and would NOT have been drawn if we hadn't done it ourself) we requested the breaker box to be inside of the garage. The electrician put the box on the exterior of the house. He had to rewire the entire house at his own expense. One thing we messed up on was the interior paint. On the schedule we put PT-1 on every wall. When it came down to it, they wanted to charge an additional $7,000 to paint each room a different color (we painted it ourselves to save money).

This amount of planning was done BEFORE we even had contractors bid on the house. No, most architects or draftsmen with not do this much work for you at their basic rate. On the other hand, the up front expense will probably pay for itself in dispute resolution and change orders down the line.

This is one case where planning ahead really pays off. I highly recommend taking the time to plan your construction project IN DETAIL and get a FIXED PRICE CONTRACT before you jump in.

CARe recommends you keep your existing homeowners policy and have the dwelling portion of the coverage reduced to accurately reflect the condition of your house (for example, $0 in a total loss). California Insurance Code Section 675 requires insurance companies to do just that. In part, the code reads:

“If reconstruction of the primary insured structure has not been completed by the time of policy renewal, the insurer... shall adjust the limits and coverages... that reflect the change, if any, in the insured's exposure to loss. The insurer shall adjust the premium charged to reflect any change in coverage.”
Insurance Code available at: http://www.leginfo.ca.gov/.html/ins_table_of_contents.html

But why? Your policy includes other coverages besides dwelling protection. You  have personal property coverage even at your current temporary location. You also have liability coverage on the empty lot. These coverages are worth keeping.

Also, you will be able to continue with your existing coverage instead of finding new coverage when you rebuild your house. If you do not renew your policy, you may not find adequate coverage as some carriers stop writing policies in an area after a disaster and you might end up with lesser coverage from another company.

Pay the current premium. Insurers are required by California Insurance Code to rebate some of the money based on the reduced exposure or risk. If they don’t, then write a letter asking for them to comply with the above noted California Insurance Code.

 

Inspirational Quotes

There ought to be a national registry of child molesters and insurance company executives, because I hold them in the same very low esteem.

US Representative Gene Taylor (D), Mississippi

Testimonials

...had it not been for CARe's workshops, we shudder to think what the end result would have been for us in dealing with the aftermath of the fire and particularly the insurance company....the kindness and GENUINE "CARing" (!), their incredible bank of knowledge, and consistent support is almost beyond comprehension. We hope to be able to pass this same caring and "know-how" on to future victims (God forbid) when the need arises.

2003 Cedar Fire Survivor, San Diego CA