When your house has damage, say, from a fire, all the repairs have to be done to the current code. In other words, if your home had electrical wiring from 1968 and it was damaged in the fire, then all the electrical must be brought up to current code. Insurance policies in Massachusetts traditionally provide code upgrades up to to 10% of the policy. If you have a $500,000 policy, then the insurance company will pay $50,000 towards code upgrades.
A catastrophe is a time of great stress. You may find that insurance adjusters and/or contractors show up at the fire to try to get you to sign with them. Do not sign with anyone on the day of the fire. If your home is a total loss, then you probably don't need an adjuster, you are going to get the whole of the policy. You don't need anyone to advocate for you and take 10% of your proceeds. In any event, do not sign any documents the day of the fire. Take a little bit of time to take a deep breath and take stock. I promise you, adjusters will be happy to help you, if you decide you need them a few days later.
When meeting with contractors, find out whether code upgrades are included in the contract price or not. If they are not included in the price, then secure estimates for the cost of those upgrades before signing with the contractor. Also, check the scope of the work carefully. If your contract is tied to the insurance adjuster's scope of work, you may find that certain things are excluded from the scope of the work because the adjuster did not note the issue. For example, if the insurance company deems that just one wall of your living room needs painting, then double check to see if the quote from the contractor provides for a fresh coat of paint for the whole room or just that one wall. If that fourth wall is not included, then you will either not get it painted or you will pay extra for it.
Sometimes, a contractor can swap out something the insurance will pay for, for an upgrade or something you want done, that is not covered by the insurance money. If you plan on doing some "while we're at it" changes, be clear with the contractor as to the cost. If you are foregoing something called for in the insurance adjuster's report, then make sure all the changes are in writing.
Finally, just because you receive funds from the insurance company, that does not mean the contract is entitled to them. Similarly, just because the insurance company says something needs to be fixed that does not mean that your contractor is obligated to do that work. Review all documents carefully. Understand the scope of the work included and understand what unknowns might possibly arise during the work. If you have questions or are unsure, ask questions and consider consulting with an attorney before you sign the contract.
When meeting with contractors, find out whether code upgrades are included in the contract price or not. If they are not included in the price, then secure estimates for the cost of those upgrades before signing with the contractor. Also, check the scope of the work carefully. If your contract is tied to the insurance adjuster's scope of work, you may find that certain things are excluded from the scope of the work because the adjuster did not note the issue. For example, if the insurance company deems that just one wall of your living room needs painting, then double check to see if the quote from the contractor provides for a fresh coat of paint for the whole room or just that one wall. If that fourth wall is not included, then you will either not get it painted or you will pay extra for it.
Sometimes, a contractor can swap out something the insurance will pay for, for an upgrade or something you want done, that is not covered by the insurance money. If you plan on doing some "while we're at it" changes, be clear with the contractor as to the cost. If you are foregoing something called for in the insurance adjuster's report, then make sure all the changes are in writing.
Finally, just because you receive funds from the insurance company, that does not mean the contract is entitled to them. Similarly, just because the insurance company says something needs to be fixed that does not mean that your contractor is obligated to do that work. Review all documents carefully. Understand the scope of the work included and understand what unknowns might possibly arise during the work. If you have questions or are unsure, ask questions and consider consulting with an attorney before you sign the contract.
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