Starting January 1, 2012, residential contractors in Illinois have to jump through another hoop. If any part of a job may be covered by insurance proceeds, section 513/18 of Illinois’ Home Repair and Remodeling Act will require a special notice in the contract and extra cancellation forms. Section 513/18 applies if:
The work is on an existing residential building with from one to six units, and
- The work is valued at $1,000 or more, and
- Repairs are needed because of damage from a “natural occurrence” and
- More than one residence was damaged by this natural occurrence, and
- Part of the work may be covered by proceeds from property insurance.
Can’t offer a discount on the insurance work.
- Can’t help the homeowner file an insurance claim.
- Has to include a roofing contractor’s license number in the contract.
- Can’t start work until the insurance claim is resolved.
Contractors should be encouraged to give discounts.
- Some homeowners need help preparing claim forms.
- Not all catastrophe repairs require a roofer.
- Homeowners need the right to start repair work before their claim is settled.
Five days after the insurer has denied any part of the claim, or
Thirty days after the homeowner has delivered a proper proof of loss to the insurance carrier.
Write the contract now. But don’t start work until the insurance claim is settled.
- If only part of a job is covered by insurance, put that part on a separate contract. Write another contract for the remainder of the job. Start work on the non-insurance work when you’re ready.
- Explain section 513/18 to the owner. Until the carrier settles, your hands are tied. All you can do is prevent further damage – but only if the owner agrees in writing.