What is the difference between a “performance bond” and a “demand letter” related to fire insurance claims?

A performance bond and a demand letter are two important documents related to fire insurance claims in Washington State. A performance bond is a type of surety bond, which provides financial protection to property owners if a contractor fails to perform the contracted work. This bond typically requires the bonded contractor to pay a certain dollar amount to make the insured whole if a project goes over budget, is completed late, or does not meet certain standards. On the other hand, a demand letter is a formal request for payment for damages caused by fire or smoke. This letter is sent to the insurance company and can include evidence such as photos, reports, and records of property damage, as well as repair and remediation estimates. The demand letter also outlines the total cost of the damages, and can be used to prove that the insured has incurred losses. In short, a performance bond is a type of surety bond that provides financial protection if a contractor fails to perform a contracted project, while a demand letter is a formal request for payment for damages caused by fire or smoke.

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What is the difference between a “performance bond” and a “demand letter” related to fire insurance claims?

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