Avoiding Catastrophe Fraud
Tips to Help You Avoid Becoming a Victim of Fraud Following a Catastrophe
Catastrophes usually bring out the best in most people, but also bring out the worst in a few others. If you have just been victimized by a natural catastrophe you don’t want to become a victim again. After each natural disaster, the area affected is inundated by outsiders, including insurance adjusters, emergency/medical personnel and assistance organizations that provide valuable services. Unfortunately, experience has taught us that scam artists are drawn to disasters.
The most common types of fraud that occur after a disaster involve unscrupulous building repair firms, price gouging, offers of debris removal, and fraudulent charitable solicitations. To protect yourself, it is important to keep a sharp lookout for predators trying to take advantage of consumers.
The following can help you avoid becoming a victim:
Contact your agent immediately. You will want your claim reviewed as soon as possible so that repairs can begin promptly. In addition, your insurance coverage may provide for additional living expenses.
Beware of high pressure sales people. Don’t be rushed into signing a contract. Take the time to obtain written estimates from more than one contractor. Make sure to read the entire estimate or contract before you sign.
Get everything the contractor discusses in writing. If there are changes or modifications in the contract, they should be acknowledged by all parties in writing. Never sign a contract with blanks that have not been filled in.
Do not make large down payments. Unscrupulous vendors could disappear after receiving the down payment or after performing limited work. Federal law also requires a three day “cooling off” period for unsolicited door to door sales of more than $25.
Verify all licensing concerning those individuals or companies that you are considering hiring. Check with your state’s Better Business Bureau or Contractor’s Licensing Board for more information.
Deal only with licensed contractors. Ask to see the contractor’s license and other identification. If the person claims to be representing a contractor, but can’t show you a contractor’s license, call the contractor and find out if the person is authorized to act on the contractor’s behalf.
Only do business with a contractor who carries appropriate insurance coverage. If the contractor is not insured, you may be liable for accidents that occur on your property. Ask the contractor if he/she carries general liability and workers’ compensation insurance. Request a certificate of insurance (COI) from the contractor that shows the name of the insurance company, policy number and policy limits the contractor carries.
If you believe you have been victimized by building repair firms or you have knowledge of suspected insurance fraud, contact:
The National Insurance Crime Bureau or 800-TEL-NICB (800-835-6422)