The following information is a publication from the National Insurance Crime Bureau and is available at www.nicb.org.
A catastrophe greatly magnifies the opportunity for fraud and abuse.
Hurricanes, wildfires, floods, tornadoes, hailstorms—becoming a victim of a disaster may be impossible to avoid. However, it’s entirely possible to avoid dishonest contractors lurking in the wake of a disaster if you’re equipped with the right information.
After a disaster, contractors often go door-to-door in damaged neighborhoods offering cleanup or repair services. While many of these people are honest and reputable; others are not. Dishonest contractors may try to pocket more profit by:
- Accepting payment then never completing (or even showing up for) the job.
- Using inferior materials or performing shoddy work that’s not up to code.
Review these tips to avoid fraud after a catastrophe:
Working With Insurance
- Call your insurance company first if you think you might have damage from a storm or other disaster.
- Make sure you review and understand all documents sent to your insurance carrier. Signing an Assignment of Benefits agreement transfers your insurance rights to the contractor. Know what that means for you.
- Never let a contractor interpret the language of your insurance policy or discourage you from contacting your insurance company.
- Be on the lookout for people calling and saying they are with a national carrier. Do not provide ANY personal information over the phone without them first confirming a claim number. If something sounds fishy, report it to your insurance company immediately.
- Note that insurance carriers will never ask you to pay your deductible up front or over the phone.
Hiring a Contractor
- Get more than one estimate.
- Request references and do the research
- Ask to see the salesperson’s driver’s license and write down the license number and their vehicle’s license plate number.
- Look out for out-of-state contractor licenses and vehicle registrations, as these may indicate possible fraudulent contractors.
- Never let a contractor pressure you into making a quick decision or hiring them.
- Remember, if you didn’t request it, reject it!
Getting Work Done
- Get everything in writing. Cost, work to be done, time schedules, guarantees, payment schedules, and other expectations should be detailed and itemized.
- Never sign a contract with blanks; terms you don’t agree with can be added later.
- Never pay a contractor in full or sign a completion certificate until the work is finished.
Contractor Fraud Prevention
- If you didn’t request it, reject it!
- Get at least three written estimates for the work and compare bids.
- Check credentials, including; licenses, references, and insurance.
- Contact your insurer to make certain your policy is up to date.
- Make sure your contract states estimated construction schedules and prices for labor and materials.