Even though you live on a tight budget in a mobile home, you can still pursue the renovations you’ve been thinking about. For example, maybe you’ve wanted to renovate your cramped, outdated kitchen for ages. Or maybe it’s your bathroom. Or, maybe you’re thinking of moving on from your mobile home but want to rehab a little before selling. Now – finally – you have the funds and the opportunity to do it. So you ask around among your friends and co-workers to find a contractor and then hire the one they recommend – even though you’re not aware that you need to or even how to make sure your contractor is insured. But with a huge helping of good luck, the renovation goes smoothly, and you are delighted with the results.
But it could have been different – appallingly different – if your contractor wasn’t insured and luck hadn’t been on your side. Remember watching those television shows that depict the making right of botched jobs by shady contractors. Even though you live frugally in a mobile home and don’t plan to spurge on big renovation, you still want to protect yourself by making sure your contractor is reputable and fully insured. Here’s what you need to know.
What’s the Difference Between Bonding and Insurance
Most reputable contractors advertise themselves as “bonded and insured.” This is very important. But what, exactly, does that mean?
A surety bond assures that you’re protected if the contractor skips out and doesn’t finish the project or if he winds up doing sub-par, shoddy work. This bonding ensures that you won’t have to use your own cash or homeowner’s insurance to foot the bill in such cases.
A contractor’s insurance protects you against the cost of both damages and lawsuits. If during the renovation project, your contractor is careless and some kind of damage occurs to your home, you (or your insurer) won’t have to pay for repairs. Also, if the contractor or one of the contractor’s employees is injured working on your project, you won’t be liable.
What Kind and How Much Insurance is Needed?
Taking steps to make sure your contractor is insured in Lincoln is just the beginning. You also need to ensure that the coverage is the right match for your needs and is sufficient.
First, ask yourself if the contractor’s insurance would cover major damage to your home? Don’t think that just because you live in a mobile home it doesn’t matter. If your contractor’s insurance would cover only the bare minimum, you should keep looking.
We recommend that your contractor carry general contractor liability insurance comprising the following 3 types of coverage:
- Liability insurance – Covers injury to you or your family and protects you from lawsuits
- Workman’s Comp – Protection for the contractor’s employees in the event of injury (not required in all states for smaller contractors, check to make sure)
- Property damage – Covers damages to your home during the course of the project
Steps You Need to Take
But how, precisely, can you make sure your contractor is insured in Lincoln? There are several quick and easy steps you can take to mitigate your risk and make sure you’ve chosen a reputable, fully insured contractor. Some steps you can do easily online, while others require face-to-face time. Here’s what we recommend:
- Check out the contractor with the Better Business Bureau
- Check references and talk to former customers (social proof is very important)
- Have a formal in-depth meeting with the contractor before signing any contract
- Ask to see and get copies of insurance and bonding documents
- Get everything in writing – all aspects of work to be done, work milestones and payment schedule, completion date, contingency clauses, and so on. This step will be important if something should go awry.
How Does Your Contractor Deal With Subcontractors?
Suppose, for example, your remodel project is more complicated than anticipated and your general contractor hires subcontractors for help. But are the subcontractors insured?
It sometimes happens that subcontractors are brought in on a cash basis. There’s no record of their employment by the general contractor, and, as a result, they aren’t covered by the contractor’s insurance (or bonding) should something go wrong. So, in addition to investigating your contractor’s insurance status, you also need to determine how they deal with subcontractors. This is another reason to get everything in writing. And if you feel your contractor is hesitant or being intentionally vague, you should look for another contractor.
Knowing how to make sure your contractor is insured in Lincoln is crucial for any major work done in or on your home. Your local real estate professionals can also be a good resource when you’re checking out contractors.