State officials: Don’t pay contractors before work is finished

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Published: Oct. 15, 2020 at 11:55 AM CDT
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LAKE CHARLES, La. (KPLC) - Two state officials say they are receiving complaints of contractors requesting full payment of insurance settlements before any work is completed in the aftermath of hurricanes Laura and Delta.

Louisiana Insurance Commissioner Jim Donelon and State Representative Jonathan Goudeau jointly sent out a list of tips to avoid contractor fraud.

They say insurance checks are usually written to the policyholder and the mortgage holder. The policyholder and mortgage holder should retain control of the funds and pay contractors as they reach contractually indicated milestones.

Donelon and Goudeau offered the following suggestions:

Before any work is started, request a clearly worded, itemized contract with the name of the builder included. Review it with the contractor and make sure you understand and agree with its contents before the contract is signed. The contract should include the following:

  • A separate breakout of labor and cost of materials.
  • An agreed upon schedule for the homeowner to make payments as construction milestones are achieved.
  • The contractor’s responsibility to get all required permits.
  • The date the project is to begin and the date it is to be completed.
  • Proof of insurance coverage from the start date to the finish date.
  • A statement guaranteeing that the work area will be left in its original condition when the job is done.

If possible, go one step further and ask that the contractor’s insurance carrier mail a certificate of insurance coverage directly to you. Finally, homeowners should only pay as work is completed and should never work with contractors who are not licensed by the state of Louisiana. You can check contractor licenses by visiting or calling the Louisiana State Licensing Board for Contractors at 1-800-256-1392. You can also visit the Better Business Bureau at to see reviews of some contractors.

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