Beware of Contractor Fraud

July 23, 2009 - Be cautious when hiring contractors to repair or rebuild property damage caused by storms or natural disasters.

Following the recent hail storms in Charlotte, N.C., many contractors are now going door-to-door in neighborhoods to offer clean up and repair services. Most of these business people are reputable, but some are not.

The dishonest ones may try to convince you that you have hail damage and need a new roof. Often these individuals won’t even go on your roof to investigate the damage. They will explain to homeowners that everyone in the area was affected by the storm when that’s not the case.

“We often see these individuals travel from town to town after a storm occurs, trying to convince consumers that they have damage that needs repair,” said Scott Huber, vice president and manager, Property Claims. “In turn, consumers file insurance claims for damage that does not exist. These unscrupulous contractors try to take advantage of people who are recovering from a natural disaster.”

What you can do

The Federal Emergency Management Agency (FEMA) and NIBC offer the following tips to those who are beginning the process of rebuilding disaster-damaged property:

• Don’t be pushed into signing a contract right away.
• 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.
• Check references before deciding which contractor to choose.
• Never sign a contract with blanks.
• Don’t pay a contractor in full until the work is complete.
• Check with county or city licensing authorities to see if the contractor is licensed in their jurisdiction, as well as checking for complaints with their regional Better Business Bureau. You can find the Better Business Bureau for your location at www.bbb.org/us/find-a-bbb/.

Rebuild a stronger, safer home

The Institute for Business & Home Safety (IBHS) knows how to build stronger, safer homes. Free information is available to help you work with your contractor to build above code with disaster protection from the ground up. There is also information on high wind rated windows, doors and roofing material, as well as ways to add protection to existing homes.

Work with your insurer

The property/casualty insurance industry supports both the NICB and IBHS to help reduce the social and financial impact of disasters. Work with your insurer if you have questions about who to hire or how to rebuild your home following a catastrophe.

“It’s always a good idea to talk to your insurance company before you discuss damage and repairs with a contractor,” said Huber. “Your insurance company has professional claims adjusters who are trained to assess your property, identify storm damage and prepare an estimate for proper repair. They can also provide recommendations for reliable and licensed contractors in your area.”

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