Extension Report

Baldwin County Extension Office

302A Byrne Street

Bay Minette, AL  36507

Telephone (251) 937-7176 or

928-0860/943-5061 ext. 2222

FAX (251) 937-7285

Rick Zapata

Regional Extension Agent

Consumer Science & Personal Financial Management

August 30, 2011

It appears that storm season has started once again this year and there are some common problems associated with these storms. I thought that you might need to look at some of the issues associated with our hurricane season in case one hits on our gulf coast.

After a major storm, many people are left dazed when they see the damage to their home and land. For most people, their home represents stability. When the home is compromised, so is the stability of the family. This will usually lead to varying degrees of shock and dismay.  At this point, the family may feel overwhelmed and become easy prey to a construction fraud scheme.

When the news media shows the nation various pictures of the storm damage, contractors from across the nation see a chance to re-locate to the damaged area to work and make money. Some of these contractors are legitimate building contractors, but in many cases, they may not be contractors at all. Con-Artists watch the news also, and they too will re-locate to the damaged area; not to work, but to steal people’s insurance money.

In Alabama, if home repairs go over $10,000, contractors are required to be licensed by the Alabama Home Builders Licensure Board. This requires the contractor to take and pass a test before they can be licensed. This proves to the public that the contractor knows the standards of building practices and the Building Codes of the State of Alabama. Anyone can go to the City or County and buy a business license. There is no test required; therefore the business license does not guarantee any level of expertise in building or knowledge of the State’s building codes.

After the last hurricanes on the Gulf Coast, there were hundreds of home owners who lost all or part of their insurance proceeds to out of state contractors who started work, but did not finish the home repair. They literally “took the money and ran”. These con-artists usually insist on the money up front, before they begin the job. They prey on the home owner’s desire to restore their home for their family as soon as possible. If the home owner gets in a hurry, the con-artist wins. As a general rule, professional contractors do not go door to door to solicit business like the con-artist does.

The following steps will aid the home owner and help them not become a victim:

1. Do not give anyone all the money for the repairs up-front.
2. Do business by a contract, and get legal counsel before signing.
3. Tie the payments made to the contractor to inspection approval from the local Building Inspectors to insure the repairs are up to the code’s standard.
4. Set a start and end time for the construction project in the contract with penalties for non-compliance.
5. Have the contractor furnish you with proof of : Workers Comp. Insurance, Liability Insurance, Alabama Contractors License from the Al. Home Builders Licensure Board.
6. Call the Licensure Board 1-800-304-0853 and the Better Business Bureau to check up on the contractor for complaints.
7. Ask for references and follow up on them.
8. Do business with Alabama Contractors, they will be here after the job.
9. Get two or three bids before beginning work.
10. Make sure to pull building permits, the building inspectors are there to help you get the repairs done correctly.

Another issue facing home owners after the storm is dealing with your insurance company. Generally the insurance companies will handle your claim one or two ways: 1. They will require you to get several bids; or 2. They will send their own adjusters to figure the dollar amount of damage. In some cases, if the amount of the repairs go over a certain dollar amount, the entire structure must be brought up to the current building code. If this is the case, the insurance proceeds that only account for the damaged part, may not cover these extra costs associated with bringing the rest of the structure up to current building codes. This should be discussed with your insurance company before any final settlement.

Before making a final settlement with your insurance company, make sure that all repairs needed are listed. If needed, you may want to hire your own adjuster to estimate repairs or consider getting legal advice before you finalize your claim. In some cases, if you cash or deposit a check from your insurance company, you may be agreeing to a final settlement without knowing it. If you get in a hurry to settle, you may regret it when the actual costs of the repairs far exceeds the amount of the settlement. Please take your time so you don’t become a victim twice.

Phone: 937-7176 or 943-5061, 928-0860, ext. 2222

Baldwin County Extension Programs are supported by the Baldwin County Commission.

The Alabama Cooperative Extension System (Alabama A&M and Auburn Universities) in cooperation with the U.S. Department of Agriculture is an equal opportunity educator and employer.