Are You Ready for the 2024 Storm Season? The National Weather Service expects an active hurricane season in 2024, including tornadoes, flooding, hailstorms and 4 to 7 major hurricanes. FEMA advises: “individuals and communities need to be prepared today.” For residential contractors, that means you should be getting ready to do storm damage repair work.
Storm repair is different. It’s usually urgent. Top priority may be a temporary cover-up to restore habitability. Most jobs include roofing, siding and window repair. Payment is often guaranteed by an insurance carrier. A licensed adjuster may be involved. If you haven’t drafted a contract for storm damage repair, there’s plenty to learn.
Twenty-one states regulate storm repair work – and require a contract with specific notices and disclosures. AL, AZ, CO, GA, IL, IN, KY, LA, MI, MO, MS, NE, NY, OK, SC, SD, TN, TX, UT, WI, WV. Storm repair law is different in each of these states. But all require a written contract that:
- Includes a specific notice if any part of the work may be covered by insurance.
- Advises owners of their right to cancel the job if any part of the claim is denied.
- Requires a full refund within a certain period if the job is canceled.
Penalties can be assessed for omitting any of these notices and disclosures.
Most states allow charges for damage mitigation without a written contract – if you get approval in writing from the owner. Some states don’t allow contractors to negotiate with the insurance carrier. A licensed adjuster is required.
Here are some examples:
Arizona – Covers all repairs to a residence damaged by a “catastrophic storm” in a “specific area.” The owner has three days to cancel after an insurance claim is denied. Work can’t start until the three-day period has expired. The contract has to include a copy of the repair estimate showing damage to be repaired or not repaired and any emergency repairs already completed. If repair of the roof is included, the contract has to describe the work and how the roof was inspected. The contractor is barred from negotiating settlement of the insurance claim. The penalty for non-compliance is revocation or suspension of a contractor’s license.
Kentucky – Applies only to repair of the roof system. The owner has five days to cancel after any part of the insurance claim is denied. The contract has to include a detachable notice of cancellation in duplicate. Prohibits any payment before the end of the cancellation period. Work done to prevent further damage is exempt. The contractor is barred from negotiating settlement of the insurance claim. Prohibits reimbursement of the insurance deductible.
Louisiana – Applies only to repair of the roof system. The owner has three days to cancel after any part of the insurance claim is denied. The contract has to include a detachable notice of cancellation in duplicate. Exempts emergency work if acknowledged in writing by the owner. Prohibits doing any work before the contract is signed. Violation of the law risks a fine of up to $1,000 plus costs and attorney fees.
Texas – Storm repair contracts covered by insurance have to include a specific notice in 12-point bold type making the owner liable for any insurance deductible. A contractor or supplier who pays, waives or absorbs the insurance deductible is guilty of a Class B misdemeanor.
Wisconsin – Insured jobs require a notice: three days after denial of any part of the claim, the owner can cancel the job and get a refund. Refunds have to be made within 10 days after cancellation. A contractor can still collect for emergency services acknowledged in writing. Contractors can’t offer to rebate the insurance deductible.
It’s easy to be sure your contracts comply with storm damage repair law. Get Construction Contract Writer. The trial version is free. If you’re already using Construction Contract Writer, your program will update automatically when changes in the law affect your jobs.