The National Insurance Crime Bureau (NICB) is working with law enforcement agencies, the state departments of insurance and insurance companies to warn victims about post-disaster rebuilding scams.
After a disaster, contractors will often go door-to-door in neighborhoods that have sustained damage to offer clean up and/or construction and repair services. Most of these people are reputable, but many are not. The dishonest ones may execute schemes to defraud innocent victims. One common scheme is to pocket the payment and never show up for the job, or never complete a job that was started. Another scheme is to use inferior materials and perform shoddy work that is not up to code in order to pocket more profit.
Almost all of these scams are unsolicited—they begin with a visit from a contractor who seeks to help victims rebuild. That is why we say, "If you didn't request it, reject it." If you think you might have damage from a storm, call your insurance company first. Your insurance company will honor its policy so there is no need to rush into an agreement with a contractor who solicits your repair work—especially when you did not request it.
Watch this video to learn how to protect yourself from post-disaster scam artists.
NICB suggests you consider these tips before 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
- Demand references and check them out
- Ask to see the salesperson's driver's license and write down the license number and their vehicle's license plate number
- Never sign a contract with blanks; unacceptable terms can be added later
- Never pay a contractor in full or sign a completion certificate until the work is finished and ensure reconstruction is up to current code
- Make sure you review and understand all documents sent to your insurance carrier
- Never let a contractor pressure you into hiring them
- Never let a contractor interpret the insurance policy language
- Never let a contractor discourage you from contacting your insurance company
Another potential scam arising from the storms are flooded vehicle resales. Buying a flood vehicle is not illegal, but misrepresenting a flood-damaged vehicle as one that is not could be a crime exposing the seller to potential criminal charges. More importantly, unknowingly buying a flood-damaged vehicle may put you and your family in physical and financial danger. A vehicle's electronic systems are often destroyed from prolonged exposure to water rendering many of its safety features inoperable.
In these situations, efforts to recover your money from the seller are seldom successful since these scam artists rarely use legitimate identifying and contact information. In many cases, buyers are left with a useless vehicle and a loan that they still must repay.
For free consumer access to the vehicle salvage records of participating NICB member insurance companies who collectively provide 88 percent of the auto insurance in force today, access NICB's VINCheck.
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