How to Work with a Design-Build Firm to do Insurance Repair
Dealing with a home disaster can be one of the most inconvenient, frustrating experiences for a homeowner. Whether it’s a flood, fire, earthquake, or any other form of home damage, you’ll likely find yourself filing a homeowner’s insurance claim. If you choose to work with a design-build firm through your insurance company to repair your home, you’ll follow a specific process.
As one of Portland’s leading design-build firms, Lamont Bros. has worked with several homeowners to repair their homes following an insurance claim. We’ve been through the process of working with homeowners and their insurance companies many times. If you want to know more about how that process works, you’ve come to the right place.
This article will discuss the process for working with a design-build firm to repair your home following an insurance claim. Once you’ve finished reading, you should be able to identify the steps in the repair process. You can use this information to decide if a design-build firm like Lamont Bros. is right for your repair needs. The steps we’ll discuss in this article include:
- Explore Your Options
- Define the Project Scope
- Develop Technical Design Plans
- Prepare Your Home
- Construction
- Project Completion
Step 1 — Explore Options
When working with an insurance company to repair your home, there are two experts involved. The first expert is you — you’re the expert on your home, the damage it has sustained, and how that affects your life. Your goal is simple: you want your home to be back to normal again.
The second expert is your insurance company. They are the expert on the process of handling a claim and providing the amount of money needed to return your home to its previous condition. Their goal is to fund the repairs with as low a cost to the insurance company as possible.
The issue is, you need a third expert. You know what your home needs to look like in order to meet your expectations. Your insurance company knows how to provide you with the funds to get it there. Now, you need an expert who knows how to work with you and your insurance company to perform the work required to repair your home.
Make Contact
When you need to find a contractor for insurance repair, the first step is to reach out. If you plan to hire a design-build firm like Lamont Bros. to handle your insurance repair, we’ll schedule an initial video call to meet you and learn more about your project.
The goal of this call is for you to meet your design consultant and discuss the basics of the project. Essentially, you’ll want to describe the damage done to your home, what you want to see done to repair it, and how much the insurance company is quoting to cover.
A design-build firm isn’t always the best fit for every insurance repair job. An honest company will want to make sure they can help you before you waste your time with an in-home meeting if they’re not able to help you.
On-Site Meeting
Following your video call, your design consultant will schedule a time for you to meet with them in your home. At this meeting, you’ll discuss more in-depth your expectations for repairs. You’ll also give your design consultant a tour of the home to view the damaged space. If you have photos of how the space looked before it was damaged, that can help your design consultant to better understand the situation and how to best solve it.
Sign Preconstruction Services Agreement
Following your on-site meeting, your design consultant will put together an agreement for you to sign. This agreement will allow your design-build team to communicate and negotiate repair costs with your insurance company moving forward.
In our experience, insurance companies are much more responsive and willing to negotiate with a contractor once the contractor has entered into an agreement with the homeowner. This is why we’ll ask you to sign an agreement early on in the process. That way, we can advocate for you to insurance adjusters and ensure you are provided with the funding you deserve.
Step 2. Define the Project Scope
Once you and your design-build firm have officially begun working together, it becomes time to define the scope of repairs. The scope is the overall vision or concept of the project.
For example, let’s say a pipe burst above your kitchen and destroyed all of your cabinets, flooring, and appliances. In this case, the scope of the project would be to replace those damaged items, essentially rebuilding the entire kitchen from the ground up.
By the end of Step 2, you’ll have open lines of communication between you, your design-build firm, and your insurance company and a visual concept of how the repair will look.
Retainer Fee
After signing your retainer agreement, your design-build firm will ask for a small retainer fee to cover the cost of designing the insurance repair. Typically, this fee is a few thousand dollars and is often comparable in price to your insurance deductible.
Full Site Investigation
Once your design-build firm is on retainer, their team will begin a full site investigation to determine the extent of damages and required repairs. During the investigation, the team will thoroughly examine your home. This will include less commonly checked areas, to make sure they understand the full scope of the damage.
By completely checking and documenting the extent of repair required, your design-build team will ensure that the insurance company provides the maximum amount possible to finish the work. It’s important to identify all of the required repairs the first time. Once the claim is settled, you can’t go back and ask for more, even if you missed something the first time through.
Begin Working with Insurance Billing
Following the site investigation, you and your design-build team will begin working with the insurance company to repair the space. It is typically best to wait to file the claim until your team has had the chance to fully inspect the damages.
Many insurance companies will cut you a check almost immediately after you file your claim. It won’t be for the full amount, but it is enough to get your started. Typically, the amount is between 10%-50% of the expected cost of repairs. At the very least, this initial check usually covers the cost of the design process.
Decide On a Design Concept
The design concept is the overall scope and vision for the project. Conceptualizing the design for insurance repair is generally an easy process. This is especially true when you simply want to return your home to exactly the way it was before.
However, many homeowners will often make the most of a bad situation by upgrading their home during the repair process. Keep in mind that making upgrades won’t be covered by your insurance company. You’ll have to pay the additional portion out of pocket unless you make downgrades somewhere else to cover it.
Other times, homeowners will drastically change the scope of the repairs, essentially remodeling their homes. In this case, the homeowners fund most of it themselves and get the insurance company to pay for a small portion.
At the end of this step in the process, you should have clearly defined the scope of the project. If it differs at all from the “pre-loss condition” repair defined by your insurance company, you’ll also know what work you’ll be responsible for covering.
Negotiate for Total Insurance Coverage Amount
Your design-build firm will assemble a budget based on the design concept. Once this is complete, they will use that budget to negotiate the final amount the insurance company will cover.
The total coverage amount offered by insurance companies doesn’t always match up with the actual cost of the repair work. Many of the systems used in the insurance industry to estimate repairs produce lower price estimates than the true cost of the work. Having a contractor with a good understanding of how to properly itemize costs and bill insurance can make the difference of several thousand dollars worth of coverage.
This is why it helps to have a professional relationship with a contractor when negotiating your insurance payout. You’ll have a team who understands the true costs of repairs and can work with your insurance company to reach a reasonable total price.
Step 3. Develop Technical Designs
While the concepts will give you a visual idea of how the repairs will look, you also need specific design plans.
In construction, the plan set is a technical document that defines how your repairs will be built and what will be used to perform the work. This ranges from electrical diagrams and structural drawings to a list of product selections like cabinets and light fixtures.
The designs are the final step in the process before you’ll sign your construction contract. During this stage, you’ll be asked to provide input and make decisions for how you want your home to look and feel.
Finalize Insurance Estimate
The completed design plans will be used to develop a final project budget for your insurance repair work. Depending on your insurance company and the terms of your policy, this is where you might run into some additional charges. If the final price comes in above what your insurance company is willing to pay, you may face a choice: downgrade the designs to fit within the insurance budget or pay out of pocket to keep the designs.
Sign Construction Contract
Once your design plans are approved and the budget is complete, it’s time to sign your construction contract. This agreement give your design-build team permission to start planning and preparing to begin the insurance repair work. Most design-build firms operate on a fixed-price contract, so the price for the scope of work described in the contract is locked in once you sign.
Insurance Provides Additional Funding
After you’ve signed your contract, your design-build firm will bill your insurance company an additional amount so they can begin working on the repair. At this point, the insurance company won’t usually pay out the full amount, but it will be enough to complete a significant amount of the repair work.
Step 4. Prepare for Construction
During the preparation stage of the project, you won’t have much to do. The primary purpose of this waiting period is for your contractor to prepare their team and get the job ready for construction.
Repair work typically comes with a sense of urgency — it’s not like a remodel you were expecting and had time to plan for. For insurance repair work, your design-build firm should try to fast-track the project to ensure that there is as small of a wait time as possible. However, many insurance repair projects will require some waiting time for permitting, material ordering, and scheduling.
Get Your Home Ready
Depending on the scope of repairs, you may or may not be able to live in your home during the construction phase. Either way, it’s important to prepare your home in the weeks leading up to construction.
First, you’ll want to make sure that the work area is cleared of personal belongings. Depending on the amount of items that need to move, your insurance company may cover the cost of hiring a moving company to clear the space for you.
You’ll also want to make sure you can still function in your home during construction. For example, if your kitchen will be out of commission during construction, you may want to set up a temporary kitchen to use in the interim.
Wait for the Green Light
While you prepare your home, your design-build team will be hard at work preparing the project to begin. They’ll review the plan set to make sure the designs are good to go. Then, they’ll pull any necessary permits, which may include structural, electrical, plumbing, or HVAC.
Also during this time, your build team will order any necessary materials and products. A given remodel project can include product orders from many different vendors. Your team will time it carefully to make sure that all the items ordered arrive in time to begin the repairs.
Attend a Preconstruction Meeting
Before construction officially begins, your design-build team will hold an on-site preconstruction meeting to discuss the plan for completing the insurance repair work. During this meeting, you’ll go over general expectations for the project. Topics you will likely discuss include:
- How your team will access your home
- Protection plan to keep the rest of your home safe
- Working hours & quiet hours
- Notifying neighbors of construction work
- How to deal with pets in the home
Step 5. Begin Repair Work
By the time construction begins, you’ll have already done most of your part. Now, all you have left to do is wait for the repairs to be complete. However, living in the home while construction is going on around you can present a few challenges. It’s important to be prepared for the construction process so you are not taken by surprise.
Take a Vacation
In some cases, your insurance company may pay for you to live in a hotel or a rental home until the repairs are complete. Typically, this is only the case when the home is expected to be completely unlivable during construction. However, it’s worth checking with your insurance company to see if they will cover the cost of getting out of your house while it’s being worked on.
Plan for Allowances
Another important factor in the construction process is the use of allowances. This is when there are unknown variables in the repair’s scope of work, so the insurance company will set aside a specific amount of money to cover these costs.
Oftentimes, a design-build firm will include allowances in the contract for certain unspecified products or repairs that can’t yet be fully investigated. Since these items have not yet been specified, there is not set cost. As a result, they are given an allowance, or a set amount of money that it could cost.
Your team will close out the allowance once the specification has been made. If product-related, the close-out will come once you have made a selection. If repair or service related, the allowance will be closed out after the work has been completed and the price is known.
Step 6. Project Completion
Once the project is complete, there are a few final steps before you can rest easy and enjoy your freshly repaired home. As long as you, your design-build team, and your insurance company have all been on the same page up to this point, the final steps should be easy.
Settle Final Allowance & Client Costs
Now the repairs are made, your design-build firm will submit the final bill to the insurance company. Additionally, at this point, you’ll also make your final payment for any additional upgrades you made to the space that was not covered by insurance.
Return to your Repaired Home
It’s been a long road. Now, get on back inside and enjoy your freshly repaired home!
