Need a Contractor? Are they Insured?

We have all hired contractors to do work around our homes, some jobs big, some small. Did you ever think to ask them if they have insurance? Did you ever ask for proof of that insurance? It is second nature for contractors to provide proof of insurance for commercial work to general contractors or business owners, but for our personal homes most people never ask. So, what is the risk?

What if the contractor does damage to your home such as starts a fire? He is responsible but does he have insurance to pay for that damage? What if the contractor had an employee or day laborer to help him on the job and that person was injured. If the contractor does not have workers compensation coverage, that employee is looking to get reimbursed by someone, most likely from you as the property owner.

As a homeowner, you should always ask for proof of insurance coverage to protect you. The terminology to use to ask the contactor to provide you with a Certificate of Insurance, usually provided by his insurance agent or insurance company.

While utilizing a licensed, insured contractor usually cost more, you are properly protected. Keep in mind, if a contractor has no license, has no insurance and hires cheap unqualified help, what do you think the chances are that the job or work is going to be done to your total satisfaction? When something goes wrong, you are the one holding the bag.

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Choose Your Insurance Carrier Carefully

When consumers purchase goods and services, they want quality. This is why advertisers place commercials and ads highlighting these traits such as – “FORD TOUGH”, CHEVY TRUCK STRONG”, “AJAX STRONGER THAN DIRT”, heck even toilet paper like CHARMIN touts STRONGER BETTER. When people buy they want it to work and last.

Except when they buy insurance. They think all insurance companies and policies are the same. So they get lured into the “cheap.” Just what you want to buy, insurance from a company who may not be able to pay your claim.

I recently ran into a client who said he saved a ton of money on his auto coverage. A big strong contractor, who had big strong trucks, and he bought insurance from a company A.M. Best (the rating company) gave a C rating which is “weak”. With a rating that low, they are lucky to last a month, and who knows if they are still around when you have a claim. There are even some insurance companies that have less revenues than independent insurance agencies, how secure does that make you feel?

Insurance is there to protect you in your times of need. It is best to pick a company who is going to fulfill that prophecy. We at Beacon Insurance Group, your local independent insurance agency and broker, can give you the analysis to help you make the right choice.

Water Damage – A Claim Nightmare

Did you know that one of the most damaging claims you can have on a homeowners policy, is also preventable?

Water damages to the interior of your home is likely the homeowner insurance claim you will experience. Statistics show that there is almost a 70% chance you will experience some type of water damage claim, large or small. One statistic, which is extraordinary, is that the EPA estimates that over 25% of homeowners have a water leak to which they are unaware. Scary isn’t it?

Water damage claims can make you home unlivable and in the long run can also bring on hidden mold damage. Mold damage is usually not covered under a homeowner’s insurance policy. There are steps you can take to prevent and minimize the chances for a water damage claim coming from leaking or burst pipes. Many water damage claims occur when your home is unoccupied for a period of time.

Here are some tips for both cold weather and warm weather areas:

  • Insulate your pipes which are most exposed to cold temps
  • Turn off water supply to your washing machine, icemaker, toilets and other bathroom fixtures
  • Install a leak detection system – there are many in the market today. These devices will automatically turn off the water supply should a leak be recognized, perfect for secondary or vacation homes
  • If you have a sump pump test it throughout the year
  • Turn off water to the house and drain pipes if you will be gone for an extend period of time such as months
  • Check you hose fittings to your washer – metal fittings are preferred
  • Shut off supply line to any water softener
  • Replace the water heater per mfg recommendations – may leaks occur due to faulty water heaters

Yes, water damage claims from pipes or internal fixtures are covered by homeowner’s insurance, but put up with the inconvenience and the indirect costs associated with a water damage claim. Any ounce of prevention is always preferred.

Insurance and Advertising – What are they really trying to say?

There are a number of insurance carriers who advertise on TV, but what exactly is there real message? After all, these ads cost millions, so they are all looking for a return on investment.

Call me a skeptic but here is the formula as I see it, premiums – claims – operating costs = profit.

So, I promise cheaper premiums, my operating costs include millions in advertising and my shareholders want a profit. The only cost variable remaining is claims. I wonder after 15 minutes of saving 15 percent while being by their side if I really am in good hands?

Direct writers of insurance are the top spenders of advertising dollars on TV and other media. They will sell you what you ask for, but maybe not what you need. Can you imagine that philosophy if children were raised that way?

Independent insurance agents take the time to address you total risk and financial exposure. More options, more ideas, for their clients.