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Need to Make Repairs? Be Sure to Protect Yourself

Homeowners who face repair projects following this weekend’s storms should take steps to protect themselves financially, urges Maryland Insurance Commissioner Therese M. Goldsmith. Home repair fraud tends to increase after widespread damage. Consumers should follow the steps below when choosing whether to hire contractors and insurance claims adjusters:

  • Get more than one bid from contractors.
  • Request at least three references for the contractors you are considering.
  • Ask for proof of necessary licenses, building permits, insurance and bonding.
  • Ask to see the worker’s Home Improvement Commission license and check its expiration date. Contractors must display their license number on all of their home improvement contracts, trucks and advertisements.
  • Be wary of contractors who demand up-front payment for repairs.

While many consumers are able to resolve their property claims by dealing with their insurance company and the assigned adjuster on their own, sometimes consumers or businesses will decide they would prefer that someone else handle the insurance claim on their behalf. You can hire a public adjuster to act on your behalf to process and negotiate your claim with the insurance company.

What is a public adjuster?

Public adjusters are licensed by the Maryland Insurance Administration to work for you. They are different than claims adjusters, who work for insurance companies. Public adjusters appraise damage, prepare an estimate of the cost to repair, prepare an inventory, and process claim documentation. They are paid by you, not the insurance company.  The amount of the public adjuster’s fee is negotiable and is not set by law. Under Maryland law, you have the right to cancel a contract with a public adjuster within three business days without penalty to you.

If you hire a public adjuster, your insurance company may or may not agree with that person’s estimate of your damage. Your insurer is not obligated to accept the damages that are claimed by a public adjuster. The insurance company is obligated to settle your claim in accordance with the terms and conditions of the policy it issued to you.

Repair or rebuild?

  • If your home was destroyed and you decide to rebuild on another lot, or to purchase another home instead of rebuilding, check your insurance policy and discuss your plans with your carrier. There may be limitations on what your insurer will pay if you do not rebuild at the same location.
  • Your insurance policy provides coverage for the repair or replacement of the property with like kind and quality that you had prior to the storm. It does not provide for costly improvements or upgrades such as putting in granite countertops if, prior to the loss, your countertops were Formica.
  • If your home was not built to current building code standards, you may be required to rebuild the damaged sections according to current codes. In some cases, this may cost more. Generally, a standard homeowners insurance policy does not cover such additional expenses unless you have purchased a special endorsement to your policy. You should check to see if you have this coverage.

The Maryland Insurance Administration has information available on its website, www.insurance.maryland.gov, to help you understand the claim process and what steps you can take to resolve your claim. Under Hot Topics, click on Insurance Preparedness for Natural Disasters to find brochures on what to do after a loss, weather-related damage, and frequently asked questions about insurance coverage.

To check on a contractor’s license, call the Maryland Department of Labor, Licensing and Regulation at 410-230-6001. To verify that a public adjusters’ license is in good standing, call the Maryland Insurance Administration at 1-800-492-6116.  

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