Like clockwork, just as soon as a community begins to pick itself up after a disaster, unscrupulous companies and individuals comes out of the woodwork looking to pray on property owners desperate to make repairs and who often have insurance money in hand to do so. After deadly tornadoes moved across the Southeast earlier this year, for instance, the National Insurance Crime Bureau (NICB) and Georgia Insurance and Safety Fire Commissioner John F. King released a statement reminding residents to remain vigilant when hiring a contractor or other vendors to make repairs on homes or businesses. "Dishonest contractors will work to defraud individuals in their time of need," NICB President and CEO David Glawe said in a press release. "We know residents want to get back on their feet, but this is not a time to let your guard down. Protect yourself and your loved ones from these criminals." Insurance leaders often advise policyholders to beware of anyone who shows up at their home or business immediately following a storm. "Whether it's a contractor or public adjuster, do your research to verify credentials before signing any contracts or agreeing to any services," King said. The NICB and Commissioner King suggested the following tips to avoid hiring a contractor:
  • 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 and itemized.
  • 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, as well as vehicle registrations, as these may also indicate possible fraudulent contractors.
  • 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.
  • Ensure reconstruction is up to current code.
  • 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 pressure you into making a quick decision or hiring them.
  • Never let a contractor interpret the language of your insurance policy.
  • Never let a contractor discourage you from contacting your insurance company. Contact your insurance company first.
  • Remember, if you didn't request it, reject it!
Predatory contractors aren't new to the insurance world, which is why the American Property Casualty Insurance Association also has advice for avoiding contractor fraud. "Following a severe storm or natural disaster, it is common for crooked contractors to try and take advantage of consumers needing repairs," the APCIA said in a 2019 brochure. "These contractors often make false promises, take full advantage upfront and never finish the work or may even create damage where none existed." The slideshow above illustrates advice for avoiding contractor fraud from the APCIA. "Don't be victimized," the APCIA advised. "Use caution and commonsense to properly repair your home and avoid contractor fraud." See also:
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