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FLOOD Ed.
What you should know about floods and then some.
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FLOOD PREPAREDNESS

Fraud Schemes Can Rise Like a Flood





STUDY SHOWS VICTIMS OF CONTRACTOR FRAUD FORCED TO DELAY OR HALT HOME REBUILDING

If your home is damaged or destroyed by a tornado, flood or other disaster, you may be too distraught to be on the lookout for fraud. But disasters can bring out unscrupulous contractors that prey on disaster victims, according to the Insurance Information Institute (I.I.I.).

After a disaster, professionals often go door-to-door to offer their services in neighborhoods that have sustained damage. While many of these business people are reputable, some are not.

“For the many homeowners who have become victims of contractor fraud, it has either forced delays in rebuilding or has completely halted the rebuilding process after a disaster,” said Loretta Worters, vice president with the I.I.I.

Contractor fraud was a major obstacle facing many Louisiana homeowners as they strove to rebuild after hurricanes Katrina and Rita in 2005.According to LouisianaRebuilds.info approximately 9,000 households were affected by contractor fraud over three years after those disasters hit.

THE INSURANCE INFORMATION INSTITUTE , WHOSE JOB IT IS TO BRIDGE THE GAP BETWEEN THE CONSUMER AND INSURANCE COMPANIES,  provides these basic guidelines that can help prevent you from being defrauded after a disaster:

Building Official Impersonation

1.     Con artists SEEKING TO INVESTIGATE YOUR PROPERTY OR SEEK IMMEDIATE (TEMPORARY REPAIRS) may pose as building inspectors or government officials and demand a fee for processing emergency loan documents. Ask to see identification for anyone representing themselves as a government official. Phone the government agency to verify the identity of the official and whether there is in fact any payment of money involved.

Contractor Fraud

  1. If a contractor comes to offer services, ask to see the salesperson’s driver’s license and write down his or her license number and the vehicle’s license plate number.
  2. Investigate the track record of any contractor that you consider hiring. Look for professionals that have a solid reputation in your community. You can call your Better Business Bureau for help. Also, get references and never give anyone a deposit until after you have thoroughly researched their background.
  3. Contact your local contractor license board before signing any contract or advancing any large payments for work.
  4. Ask to see any contractor’s proof of liability and workers compensation insurance.
  5. Ask your insurance agent or company representative for a list of reputable contractors if you don’t know of any.
  6. Do not be rushed into signing a contract with any company. Instead, collect business cards and get more than one written estimate for the proposed job. Get everything in writing including cost, work to be done, time schedules, guarantees, payment schedules and other expectations that should be detailed.
  7. Never sign a contract with blanks; unacceptable terms might be added later.
  8. Beware of building contractors that encourage you to spend a lot of money on temporary repairs.
  9. Never pay a contractor in full or sign a completion certificate until the work is finished and you are sure the reconstruction is up to current code. 

 

THE CHOICE OF HIRING A CONTRACTOR IS ALWAYS THE DECISION OF THE HOMEOWNER.  MAKE CERTAIN THAT YOUR CONTRACTOR DOES NOT USE INFERIOR BUILDING MATERIALS OR DEMANDS FULL PAYMENT UP FRONT OR IS DIFFICLUT TO WORK WITH.  MAKE SURE THAT YOU ARE COMFORTABLE WITH THE DECISIONS YOU MAKE BECAUSE IF THEY ARE WRONG, CHANCES ARE NOBODY WILL BE THERE TO PROTECT YOU BEYOND WHAT YOU HAVE ALREADY BEEN PAID.     

If you believe you have been approached by an unlicensed or unscrupulous contractor, or have been encouraged to fabricate an insurance claim, contact your insurance company, the local police AND  theNational Insurance Crime Bureau hotline at 1-800-TEL-NICB (1-800-835-6422). You may also text your information to TIP411, keyword “FRAUD”, and remain anonymous if you so desire.

RELATED LINKS

Podcast: Disaster Victims: Beware of Crooked Contractors

Facts and Statistics: Insurance Fraud