Summary: In September 2022 Hurricane Ian, the fourth-largest storm in Florida's history, made landfall, with winds between 155 and 161 mph. Damages of over $112 billion ($109 billion of which were in Florida) gave Ian the dubious distinction of being the costliest storm in Florida's history. Spring 2023 wildfires in California resulted in some 3500 structure fires. And in August 2023 a wildfire destroyed the Maui (HI) town of Lahaina, resulting in an estimated $46 billion in property damage and business interruption loss.
Facing a loss is bad enough; the possibility of being the victim of fraud in the rebuilding process compounds the disaster. Following are some tips for the prudent to avoid being the target or a fraud or scam.
Introduction
In order to prevent potential fraud, awareness is key. Fraudsters could potentially pose as Federal Emergency Management Agency (FEMA) employees, overcharge for tows and car repairs, and scam residents who desperately need home repairs. These fraudsters often arrive in a community that was greatly impacted by a natural disaster and attempt to scam distressed homeowners to pay upfront for untrustworthy repairs, for work that will ultimately never be performed. In general, it is important to shop around, beware of unsolicited recommendations, check credentials, and pay for work only when it has been completed.
Before the next disaster hits, review the Federal Trade Commission's Consumer Advice: "How to Avoid Disaster Recovery Scams" for several tips on fraud avoidance (FTC.gov). Another useful article is "Survivors: Beware of Fraud, Scams after Disasters" found here.
Insurance departments also often offer tips and guidance to insureds immediately after a disaster. Departments will answer consumer questions and provide guidance on how to file a claim with your insurer.
Towing
Before getting a vehicle towed, an insured should contact the insurance company to see what services are covered. An insured should check the reputation of the towing company, if possible, by getting recommendations from friends, family members, and neighbors. Try to avoid agreeing to an unsolicited tow from a tow truck driver who seems to be in the right place at the right time. Sometimes tow companies will take advantage of a natural disaster to overcharge for towing services. Also, try to avoid a tow company that offers a tow for a much lower price than their competitors, as they may be paying their employees less or employing less qualified individuals; both situations could lead to negligent handling of your vehicle.
Be aware that although hybrid and electric vehicles are designed to be safe in water, even if submerged, dealing with them can pose significant risk even for emergency responders. Should your insured own these vehicles, please make them aware that trying to move them in event they've become flooded can prove extremely dangerous. Only a reputable towing company with experience should be engaged. Batteries that have been exposed to salt water have been known to catch fire, with the outcome that if the flooded vehicles are garaged there is risk of a house fire.
Car Repairs
The insured can ensure getting a fair deal on vehicle repairs by asking for recommendations from friends and family members and getting written estimates from mechanics and body shops. It is important to contact the insurer as soon as possible if the insured vehicle is flooded. Generally, if the estimated repair will cost more than $350, the shop should provide a written statement and ask for authorization. After the statement is authorized, the shop can exceed that estimate only by 10 percent without getting permission from the owner to continue with the repairs.
Home Repairs
A person seeking home repairs should avoid unsolicited services and recommendations and avoid paying anything upfront. A deposit for materials is common but should be paid only after a contract has been signed by both parties. Avoid contractors that vastly underbid their competition, as they may be using low-quality materials or inexperienced and low-paid employees. Beware of contractors who cannot provide references from previous customers or do not have a physical office, mailing address, phone number, or email address. These are indications of a business that has just been started or one that does not want to be contacted about previous jobs. FEMA officials do not endorse contractors and will not ask for personal information or a social security number except at the time a person is registering for initial assistance. Anyone posing as a FEMA official and asking for this information probably should not be trusted, and any business sporting a FEMA endorsement is also untrustworthy. A prudent practice might be to draw up a list of local trusted contractors and keep it ready in case of need. Require a written estimate and contract, and do not pay more than half of the cost upfront. Be sure to get a receipt.
Car Sales
Even if you do not live in an area directly affected by flooding or other natural disasters, it is wise to be aware of the signs of a car that has suffered flood damage and to keep those signs in mind while choosing a used vehicle. Cars in a dealers' lot may have suffered flood damage and may appear to be unaffected by the water, but not disclosing flood damage is classified as a misdemeanor in several states.
A car that has suffered flood damage could have mechanical or electronic problems for a future owner further down the road. Car buyers should request, or purchase for themselves, a complete history from a service like CARFAX, should check the car's title to see if it comes from a state that has recently been flooded and should have the car examined by a trustworthy mechanic before the car-buyer decides to purchase. If possible, the car buyer themselves can check for mud or rust in the trunk, glove box, and dashboard, mismatched carpets, and malfunctioning electronics. Not all of these signs are indicative of a car that has been damaged in a flood, but could be a clue that the seller is not trustworthy.
Conclusion
In order to prevent the loss of money in a fraudulent repair scheme, it is prudent to take time researching and choosing a contractor or repair shop that is trustworthy and recommended within the community. When possible, check the State Licensing Board for contractors to ensure they are licensed, even if they have provided a piece of paper that appears to be a license and check with the Better Business Bureau to make sure there are no customer complaints lodged against the contracting company. Natural disasters cause billions of dollars in damages in the U.S. each year, and preventing post-flood fraudulent activity could help to mitigate those damages.
Original October 24, 2016