It is simple if you know what to do. You will feel exactly the same way when you know how to find and zero-in on the best workman’s compensation insurance and general liability insurance. There are some gray areas that may need to be clarified.
1. Contractor’s insurance — Did you know this is a misnomer. This is because the insurance covers the contractor, not the homeowner. To protect their home, the homeowner will need a surety bond. It is sometimes confused with contractor’s insurance as both the homeowner or contractor can purchase it to protect themselves. The surety bond helps to “insure” the buyer against certain conditions and problems.
2. Is there a set amount for a surety bond? It is, but the amount varies from one State to another. California requires general contractors to have a bond of twelve thousand dollars. However, the amount required in other states is different. Arizona, for example, requires five thousand dollars and Oregon twenty thousand.
3. What does this sum mean? Many believe that this sum is what you can get against a poor job. The bond is not against the job, but against the contractor. Therefore, the court will decide how much of the amount could be awarded to the aggrieved. This is a lengthy process and is usually based on the job’s value.
4. What about damages? Judges are responsible for determining damages. Except for fraud, which is clearly defined by law, damages must be quantified and specified before an award can be made. Because the definition of damage is very vague, homeowners would need to show that they have suffered a financial loss in order to win such a case.
5. What should you do if the contractor does a poor job? Visit the Surety Bond Company and the State Contractor Licensing Board. The Board will give you information about which insurance company to contact. Once you have received the money, the insurer will send it to you. Contractors may be taken to court by the latter to recover their money. This proves that the’surety bonds’ are not insurance policies. The contractor would be responsible for the reimbursement.
You now know the difference between insurance and a surety bond. So, contact the best contractor you can find and you won’t be disappointed. It is worth your time to ensure that you hire the best contractor possible, even if the market rate is slightly higher. Although you may not lose too much money with a poor contractor, it will cost you time, enthusiasm, and a lot of effort to find the right contractor. You could also lose your job and be penalized. It is better to choose the best.