Home Owners Insurance

Discussion in 'Business Operations' started by DFW Area Landscaper, Apr 28, 2004.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    I've heard it said on this sight several times that home owners insurance won't pay for damages caused by uninsured contractors hired by the home owners.

    I'd like to include a copy of an article wherein this has happened to someone with my new customer welcome letter. Ideally, a real horror story where some home owner lost everything they owned. Anyone have a link or can you help me out???

    DFW Area Landscaper
  2. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Messages: 7,547

    I think your right, i THINK. I would ask your insurance agent, they know all the horror stories. I think it s so you buy more insurance than you need, but thats where I would go. Mine always has some story like i think your looking for.
  3. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Messages: 4,040

    Hi DFW Area Landscaper,

    Here is a quote from this site.

    "I am so glad you asked that question. Uninsured Contractors cost homeowners a great deal of money every year, and the sad part is that the homeowner doesn't realize the extent of the risk they are taking when hiring a less than reputable Contractor.

    Here's the story: Mr. and Mrs. Homeowner hire Bob over at Slamitup Contractors to remodel their home. Bob appears semi-professional, has done a lot of work in the neighborhood, and is quite a bit less expensive than other Contractors. Bob is a sole proprietor, and therefore is not required to have Workmen's Compensation insurance by law. Bob asks Mr. & Mrs. Homeowner to acquire any necessary permits and they do so without any questions. Slamitup Contractors show up the first day with a crew of 3 and begin work. One of the crew slips off a ladder and falls breaking his hip. It turns out the injury is quite serious and the worker may never walk properly again. Since Slamitup Contractors was not insured for work related injuries for anyone except Bob, the worker and his family sue everyone in sight including Mr. & Mrs. Homeowner. Here's where it gets scary. Mr. & Mrs. Homeowner had not updated their insurance policy in years, and were grossly underinsured. It turns out that the cost of the workers injury, therapy, lost wages, and pain and suffering will run 3 times over the limit of the insurance that the homeowner had. But why not sue the Contractor? They will, but he is uninsured, and has no tangible assets to speak of except that station wagon with the fake wood on the side. After all, he was a very small Contractor who was paying all his workers cash to keep his price low.

    Well, the Homeowners insurance Company paid out the limit of the policy but informs Mr. & Mrs. Homeowner they are on their own for the rest. Needless to say, the litigation goes on for years and the expenses tap out Mr. & Mrs. Homeowners savings, retirement fund, and they may even loose their home and property if the lawyers have anything to say about it.

    The moral of the story? Even though Bob at Slamitup was a good guy and never intended for something like this to happen, it is up to you as a homeowner to protect yourself. The City can't do it, The State can't do it, NARI can't do it - only you can do it. Make sure your Contractor has Liability AND Workmen's Compensation insurance as a minimum before they take one step on your property. "
  4. jgarciasr

    jgarciasr LawnSite Member
    Messages: 23

    I just got an idea. I think it sounds good, here it is. What if an anonymous "Good Samaritan" sent out the example Gopher posted to a good section of your area and included in it that the laws apply to all contractors including LCO's. Maybe they would think twice when accepting the bid of the lowballers. What do ya'll think.
  5. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Messages: 1,912

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