Three kinds of change in a damage rebuild
In ordinary remodeling, change orders mostly come from the owner. After a loss there are at least three sources, and mixing them up causes most of the arguments that end up in final-payment disputes.
The first is hidden damage tied to the loss: wet framing, a burned wire run, a cracked joist above the ceiling. That work may be covered and usually needs a supplement to the insurance estimate. The second is pre-existing conditions the loss did not cause, such as old rot under a shower that has leaked slowly for years. Those are often the owner's cost. The third is choices: a different floor, a moved wall, an added outlet. Those are almost always the owner's cost, or the difference in cost.
A good change order says which kind it is. If it does not, ask. A homeowner who signs a change order that calls owner-paid upgrades insurance work, or the reverse, can end up with a final bill that does not reconcile with what the insurer paid.
Sorting a change before you sign it
- IfThe new work is damage the loss caused and nobody could see earlierThenAsk that it be documented and submitted as a supplement before it is covered up.
- IfThe new work fixes a condition that existed before the lossThenExpect it to be your cost; ask for a separate price and decide whether to do it now.
- IfYou want a different product or layout than the estimate showsThenAsk for the credit for the original item and the price of the new one on the same form.
- IfA building inspector requires something extraThenAsk whether your policy's ordinance or law coverage might apply, and document the inspector's note.
- IfThe contractor wants to substitute a material because of availabilityThenApprove samples first and confirm the substitution in writing, even at no cost change.
Every change order should include
- A number and date so changes can be tracked in order
- The location in the house and a plain description of the work
- Why the change is needed: hidden damage, code, owner choice or substitution
- The cost effect, including any credit for work removed
- Who is expected to pay: insurer, owner or split
- The schedule effect in days, if any
- Signatures from both owner and contractor before the work proceeds
General information for Littleton, not a quote or professional advice. In an emergency, call 911.