What's Next for Owners of Flooded Homes: Advice from the Better Business Bureau

September 17, 2008 8:27:47 AM PDT
Chicago and northern Illinois experienced 6-10 inches of heavy rainfall and power outages last weekend. (news release) The flooding has resulted in four flood-related deaths and the rescue and displacement of many Chicagoland families. Flights were delayed and cancelled at Chicago's O'Hare Airport, I-90 was temporarily closed, and Chicago Transit Authority's Blue Line service was also temporarily suspended between Rosemont and O'Hare. The flooding created several road and highway closures, creating traffic jams.

According to the National Association of Insurance Commissioners, 33 percent of U.S. heads of household falsely believe that flood damage is covered by a standard homeowner's insurance policy. Because the devastation from a flood is typically widespread and costly, many insurers in the U.S. do not even provide flood insurance.

"When it's time to spend your hard-earned money, especially in emergency situations when people's homes or businesses are damaged, it's time to check with the Better Business Bureau," said Steve J. Bernas, president & CEO of the Better Business Bureau of Chicago and Northern Illinois. "Our information and services are available 24-7 to assist you at the time you want to make your purchasing decision. When you use the BBB free services, you start with trust."

The BBB suggests that you solicit two or three bids for the repair work you are planning. Do not automatically accept the lowest offer. Make sure all bids are based on the same set of specifications and materials to be used. Ask for local references and inspect the finished projects. Check to see if the contractor is a member of a professional association which has standards for members. Make sure the contractor is in compliance with all local licensing, bonding, and insurance requirements, and that any necessary building permit is obtained.

Most standard homeowner's insurance policies don't cover damage caused by a backed-up sewer system either. Homeowners who found themselves with something as simple as a clogged toilet or as devastating as a basement full of sewage have learned the hard way the importance of reading the fine print on a homeowners insurance policy.

Never sign a blank or partially blank contract, especially in emergency situations when your home may be damaged. Typically a down payment of one-third of the total contract price is made with additional payments made after completion of each phase of work; final payment should not be made until work is completed and you have inspected the work.

"On these occasions many of the best contractors are already spoken for," said Bernas. "This is when checking with the BBB becomes even more important."

Look for the BBB Accredited Businesses logo and use the following tips:

  • Contact the BBB to learn how long a contractor has been in business at www.bbb.org.
  • Compare costs before making a financial commitment.
  • Discuss bids in detail with each contractor.
  • Ask the contractor for local references and find out if he or she is a member of a professional remodelers association.
  • Find out if a contractor is insured against claims covering worker's compensation, property damage, and personal liability.
  • BBB recommends you take some basic preparedness steps to help you immediately following a catastrophe and offers advice for working with your insurance adjuster to ease the stress and anguish after disaster strikes.

  • Create and maintain an inventory of your personal possessions. This includes taking pictures or creating a video, as well as keeping receipts for major items.
  • Make sure you carry your policy numbers and contact information for your insurance company with you at all times.
  • Contact your insurance adjuster immediately. Not only does this get the ball rolling on the claims process, but you might be eligible for loss-of-use benefits, which means you could be reimbursed for hotel costs, food, and other living expenses while your house is unlivable.
  • Document the damage to your property and possessions thoroughly.
  • Keep all your receipts spent on supplies and living expenses for future reimbursement.
  • Do not make any permanent repairs until you get approval from your insurance company. Your insurer might not fully reimburse you for repairs made without their authorization.
  • Insured drivers whose cars have been flooded may be covered. Car owners should read their car insurance policy closely or they will miss out on reimbursements or other benefits they are entitled to when disaster strikes.
  • If your house was destroyed by a major disaster, you may qualify for additional assistance when insurance doesn't cover all of your losses. Check with the Federal Emergency Management Agency at fema.gov for more information.
  • For more advice you can trust on protecting your home and loved ones before and after natural disasters, go to bbb.org.

    About the BBB

    As private, non-profit organization, the purpose of the Better Business Bureau is to promote an ethical marketplace. BBBs help resolve buyer/seller complaints by means of conciliation, mediation and arbitration. BBBs also review advertising claims, online business practices and charitable organizations. BBBs develop and issue reports on businesses and nonprofit organizations and encourage people to check out a company or charity before making a purchase or donation.


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