If You Didn't Request It – Reject It
DES PLAINES, Ill., June 6, 2012 /PRNewswire-USNewswire/ -- Each year, natural disasters affect thousands of people, often damaging or totally destroying their dwellings. Although avoiding a disaster might be impossible, preparing for one is not and having adequate homeowners insurance is one way to prepare for the unthinkable.
The purpose of homeowners insurance, among other things, is to protect you from financial harm by covering the cost of repairing or replacing damaged or destroyed property caused by any number of events. Policies and coverage vary so be sure that you understand exactly what your policy protects and how it will perform should you sustain a loss. If necessary, secure additional protection to satisfy your specific needs.
But beware, as well, of those who scour disaster areas to make a fast—and illegal—buck.
It is an unfortunate reality that after a disaster contractors and others will often go door-to-door in neighborhoods which have sustained damage to offer clean up and/or construction and repair services. Most of these business people are reputable, but many are not. The dishonest ones may execute schemes to defraud innocent victims. One such scheme is to pocket the payment and never show up for the job, or never complete a job that was started. Another scheme is to use inferior materials and perform shoddy work not up to code in order to pocket more profit.
The most recent scheme involves contractors who intentionally damage siding and roofing to mimic hail or wind damage. Some contractors may seek to enlist the homeowner in the scam. For example, a dishonest contractor might use a recent storm as a reason to instruct you to file a damage claim, when in fact the so-called damage was actually wear and tear to your property that had occurred over a period of several years.
Professional public adjusters are also available to policyholders who choose to accept their services. They are licensed and will work with policyholders in navigating the claims process. Unfortunately, as with some contractors, there are occasionally instances where public adjusters have committed fraud in the claims process.
Some public adjusters may seek to enlist the homeowner in the scam. For example, a public adjuster might work with a restoration company that will tear out large portions of the interior property that were not damaged and claim that the torn out undamaged property was part of an otherwise legitimate claim.
Sometimes restoration companies working with your public adjuster will tear out and damage unrelated areas of your home to inflate your estimate of damages. This is a scam to "pad" the bill to cover the commission paid to the public adjuster. There might be a "kick-back" being paid between the restoration company and the public adjuster or vice versa. This padding of your bill and deliberate damage raises everyone's insurance premiums. In addition, if you are aware that the restoration company has intentionally torn-out unaffected areas of your home, you as an insured and law abiding citizen should report this to your local police department as "vandalism."
Make sure the public adjuster does not intentionally delay reporting your claim. Your policy language is specific to the contract you entered into with your insurance company and usually requires that you mitigate your damage and report your claim within a reasonable amount of time.
Almost all of these scams begin with an unsolicited visit from a contractor or public adjuster. That is why we say, "If you didn't request it, reject it." If you have damage from a storm, contact your insurance company first. Your insurance company will honor its policy and will cover you for losses so there is no need to speak with a contractor who solicits your repair work—especially when you did not request it.
Finally, be alert to any suggestion or hint from a contractor or public adjuster that you, as the homeowner, look the other way while they process a repair estimate that you know to be inflated. That is insurance fraud and that could potentially put you at risk of criminal prosecution.
If you sustain damage, let your insurance policy work for you—no more and no less. That is the safest and most efficient way to get your damaged property repaired.
NICB suggests you consider these tips before hiring a contractor and/or public adjuster:
- Contact your insurance company first
- Get more than one estimate
- Get everything in writing. Cost, work to be done, time schedules, guarantees, payment schedules and other expectations should be detailed
- Demand that the public adjuster provides a "scope of damages" (estimate) to your insurance company. The estimate of damages should be comparable to your insurance company adjuster's estimate.
- Demand references and check them out
- Ask to see the contractor's driver's license and write down the license number and their vehicle's license plate number
- Never sign a contract with blanks; unacceptable terms can be added later
- Never pay a contractor in full or sign a completion certificate until the work is finished and ensure reconstruction is up to current code
- Make sure you review and understand all documents sent to your insurance carrier
- Never let a contractor pressure you into hiring them
- Never let a contractor interpret the insurance policy language
- Never let a contractor discourage you from contacting your insurance company
You can download our disaster fraud brochure and other fraud awareness materials here.
Finally, if you believe you have been approached by an unscrupulous contractor or adjuster, or have been encouraged to fabricate an insurance claim, contact your insurance company or call the NICB toll-free at 1-800-TEL-NICB (1-800-835-6422). You may also text keyword "fraud" to TIP411 (847411) or report it online by visiting our website at www.nicb.org. Or, iPhone or iPad users can download the NICB Fraud Tips app to make it easy to quickly send a tip and get a response.
About the National Insurance Crime Bureau: headquartered in Des Plaines, Ill., the NICB is the nation's leading not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through data analytics, investigations, training, legislative advocacy and public awareness. The NICB is supported by more than 1,100 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $339 billion in insurance premiums in 2011, or approximately 80 percent of the nation's property/casualty insurance. That includes more than 94 percent ($156 billion) of the nation's personal auto insurance. To learn more visit www.nicb.org.
SOURCE National Insurance Crime Bureau