Hi everybody! Hey if you've got a roofing contractor or a general contractor or
really any contractor for that matter who's asking you to sign over your
insurance check to him that could be a big red flag.
Hi everybody this Tracy Bookman owner of Homestead Roofing and welcome to another
one of our walk in the park series videos where we take just a few minutes
to answer your questions about roof repairs, roof replacements, and the
insurance claim process and today we want to answer your question: should I
sign over my insurance check to my roofer? Well just like a lot of the
questions that we answer, there are a lot of different variables which could
affect how you want to proceed with signing over the insurance check that
you got from your insurance company to your roofing contractor or to any
contractor. So first let's talk about when it's okay to sign a check over to
your contractor. Now we're going to assume that you have replacement cost
value coverage on your property claim and if you do then that means you're
going to get two different checks you're gonna get one check from your insurance
company right at the start of the claim and then the second check is going to
come when the repairs are all done and your insurance company has received all
the invoices for it and they're going to send you the second check which is your
called your depreciation amount. Now remember we're talking about when it's
okay to sign a check over to your contractor. If the work has already been
done and you've gotten that second check from your insurance company and that
check does not exceed the amount that you owe your contractor then it's okay
to sign that check over to the contractor because if that check
represents either the total amount that is still due to the contractor or a
partial amount that's still due to the contractor then there's no risk to you
as the insured or as the homeowner to sign that check over. But what about that
first check is it ever okay to sign that first check over to your contractor well
actually there are some circumstances in which that's okay too. Now according to
Colorado law SB 38 a roofing contractor should not be collecting deposit money
upfront from a homeowner before materials are delivered to the
property. So if materials have already been delivered to the property then that
is essentially the earnest from your contractor that he intends to do the job.
So if you have materials at your property and if the amount that the
contractor is requesting that you pay him i.e. the insurance check that he wants
you to sign over to him is not more than I would say 50% of the total project
amount then it's okay to sign that check over to the roofing contractor. But
remember if you get an insurance check and it's more than that 50% amount or
whatever it is that your contractor is asking for as a deposit then bad idea to
sign that check over because if you've got an insurance claim it may include
more in it than just the roof or just the work that that particular contractor
is asking or is wanting to do for you so if you get a check that has payments in
it for more than that contractor is going to be working for you to do and
that checks going to include money for the other work that your insurance
company wants you to do if you sign that check over to the roofing contractor you
may not see that money again. Another situation where it's okay to
sign a check over to your roofing contractor or to a contractor would be
is if you have an actual cash value coverage on your insurance claim and
you're only going to get one check so typically that checks not going to be
enough to do the work that the contractor is going to do for you so
you're going to have to come up with some extra money sometimes to pay the
deposit sometimes to pay the final bill and so at that point I don't see a
problem with signing that check over to your contractor. Now that we've covered
the situations in which it is not going to be a risk to you to sign over a check
let's talk about the situations where it would be just a really bad idea
to sign a check over to a contractor and basically these are just the opposites
of what we've already talked about so if you have replacement cost value coverage
on your policy and you're going to be getting two checks it's a really bad
idea to sign that first check over to the contractor if no materials have been
delivered so a lot of times what happens is a roofer I'm only talking about
roofers because that's where my experience is I don't know about general
contractors I don't know about other contractors but a lot of times a roofing
contractor when he comes over and does this proposal does this pitch for
selling you on his services for your roof if you agree and you sign the
contract sometimes that roofer might ask you to
sign over the insurance check right then and there in fact I used to work for a
roofing company that that's what they trained us to do once you get that
signed contract you ask for the check right then and there.
Why is that such a bad idea? Because if you sign that check over to the roofing
contractor or to a contractor and that contractor decides he doesn't want to do
the work he's gonna skip out he's got your check if that is your
check from the insurance company you don't really have any recourse that's
just gone. The insurance company is not going to take pity on you and mail you a
replacement check for that I hate to break that news to you. But if you have
written that contractor a personal check then at least within a couple of days
you have some recourse if you find out that maybe he's not returning your calls
he's not answering email or whatever you can cancel that check whereas if you've
signed over that insurance check you can't do that.
So another situation in which you would not want to sign over your insurance
check of course it is if that check exceeds the amount either of the total
job that is being done now I'm laughing about that and you might think that's
actually kind of silly but it happens right people get that insurance check
and the roofing contractor tells them I'll just sign it over to me and then
I'll cut you a check for the difference never do that but if the check exceeds
the amount of the deposit payment that the contractor is requiring from you
don't sign it over. I just wouldn't do that if the contractor wants a 50%
deposit give him 50% if he wants a 33% deposit
whatever the amount is that your contractor is asking you for is a
deposit that's what you should pay him and if your insurance check exceeds that
amount do not sign that check over. So in summary it's okay to sign an
insurance check over to a roofer if you've already got materials delivered
to you to your property the check amount doesn't exceed the amount that is being
required of you for a deposit or if it's the final check that you've gotten from
your insurance company and again that check does not exceed the total amount
that you're being billed by your contractor. So I hope this video has been
helpful for you if you've got any questions about this particular topic or
any other topic please give us a call right up here at our phone number
719.433.6991 or you can also visit our website
that's right down here at homesteadroofingcolorado.com we've got a ton of
other videos out there lots of information for you lots of answered
questions that you might have and if this video has been helpful for you we
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until our next walk in the park video I'm Tracy Bookman owner of Homestead Roofing.