Smokies Wildfires Devastate Tennessee Communities

1632399_1280x720The recent wildfires that quickly ripped through Tennessee’s Smoky Mountains threatened the lives of tens of thousands of residents in the Gatlinburg area. The fire, likely a result of arson, has already claimed the lives of 11 people as of Friday morning.

Right now, insurance company representatives are in the field staffing catastrophe centers and working non-stop to assist victims in rebuilding their lives, their homes and their businesses. As hard as these professionals work to quickly handle the thousands of claims that these kinds of events generate, there are always some victims who experience additional pain—not from the fires, but from greedy scam artists and unscrupulous contractors.

After a natural disaster salespeople go door to door in damaged neighborhoods, offering cleanup or repair services. While many of these are honest and reputable, others are not. The dishonest ones may pocket the payment without completing the job or use inferior materials and perform shoddy work not up to code.

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 contractor’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

You can download our disaster fraud brochure and other fraud awareness materials here.

If you believe you have been approached by an unscrupulous contractor or adjuster, or have been encouraged to fabricate an insurance claim, contact your insurance company or call the NICB toll-free at 1-800-TEL-NICB (1-800-835-6422). You may also text keyword “fraud” to TIP411 (847411) or report it online by visiting our Web site at www.nicb.org.

Hurricane Matthew Could Bring a Storm of Fraudsters

As Hurricane Matthew begins to approach Florida and the southeastern part of the United States damage and significant flooding is expected. The National Insurance Crime Bureau is warning residents of these areas to be on alert for contractor scams after the storm passes.

Becoming a victim of a natural disaster may be impossible to avoid. You can, however, avoid being victimized by dishonest contractors often found lurking in their wake.

After a natural disaster, salespeople go door to door in damaged neighborhoods, offering cleanup or repair services. While many of these businesses are honest and reputable, others are not. The dishonest ones may pocket the payment without completing the job or use inferior materials and perform shoddy work not up to code.

The NICB recommends these tips before you act on a contractor’s offer for services.

  • Work with only licensed and insured contractors.
  • Get more than one estimate. Don’t be pushed into signing a contract right away.
  • Get everything in writing.
  • Require references, and check them out.
  • Never sign a contract with blanks. Fraudulent contractors may enter unacceptable terms later.
  • Never pay in full.

For more tips you can download our disaster fraud brochure here.

When Hail Hits Storm Chasers Arrive

The recent hail storm that damaged thousands of homes and vehicles in the Colorado Springs area has once again attracted an onslaught of “storm chasers” – unscrupulous contractors going door-to-door to try to get victims to let them repair their roofs or other hail damage.

The National Insurance Crime Bureau (NICB) says Colorado was second only to Texas in the number of hail damage insurance claims from 2013 to 2015 (Hail Claims).

NICB warns that the thousands of homeowner damage claims and millions of dollars that are being paid out by their insurance companies have resulted in a dramatic increase in the number of contractors claiming to be “licensed” and going door-to-door, without being invited, to solicit business. All too frequently, victims will allow them to go up on their roofs to inspect for damage, without knowing if the company has a valid license or has proper business insurance. Homeowners may find themselves liable if someone is injured on the roof without proper workers compensation or business insurance.

In some cases, the contractors will take the victim’s money, make limited repairs or no repairs at all, and disappear – leaving the property owner victimized a second time.

Working with a coalition of insurance industry, consumer, contractor industry and government groups, NICB is urging consumers to know their rights under legislation passed in the state in 2014 to protect them from high pressure tactics. Those include the right to know the following:

  • Scope of work and materials to be provided.
  • Cost for same based on damages known at the time the contract is entered into.
  • Approximate dates of service.
  • Roofing contractor’s contact information.
  • Identification of contractor’s surety and liability coverage insurer and their contact information.
  • Contractor’s policy regarding cancellation of contract and refund of any deposit including a rescission clause allowing the property owner to rescind the contract for roofing services and obtain a full refund of any deposit within 72 hours after entering the contract.
  • A statement that if the property owner plans to pay for the roofing services through an insurance claim, the contractor cannot pay, waive or rebate the homeowner’s insurance deductible in part or in whole.
  • A statement that the contractor shall hold in trust any payment from the property owner until the contractor has delivered roofing materials to the job site or has performed a majority of the roofing work on the property.
NICB reminds victims to do their homework and resist the pressure from unwelcomed contractors. Remember, if you didn’t request it, reject it! For more information on the Colorado campaign on social media search #NoRoofScams.

Hail Claims Fluctuate Over Past Three Years

Tell a claims adjuster in Texas today that hail damage claims decreased over the past three years and they might consider you crazy. Dealing with thousands of claims from recent record storms in the Dallas and San Antonio areas, insurers and their customers know how Mother Nature can be peaceful one day and in a fury the next.

A hail damaged windshield from an April 2016 storm in Wylie, TX.

A hail damaged windshield from an April 2016 storm in Wylie, TX.

The National Insurance Crime Bureau (NICB) today released the most recent three-year analysis of insurance claims associated with hail storms in the United States. In 2013, there were 720,473 hail damage claims filed. That number increased in 2014 to 824,325 then dropped in 2015 to 572,182 claims–an overall decrease of 21percent from 2013 to 2015.

The nation experienced 10 major hail-producing storms during this period according to the National Oceanic and Atmospheric Administration (NOAA), each of which caused over $1 billion in property damage. While experts debate why these storms occur, no one argues with their effects—extensive property damage and many times, loss of life.

According to data from Verisk’s A-PLUSTM property database, U.S. insurers paid almost nine million claims for hail losses, totaling more than $54 billion from 2000 through 2013.

In recent years, the costs of these hail-related claims has dramatically increased. The average claim severity during the period 2008-2013 was 65 percent higher than it was from 2000 through 2007.

Weather-related property damage can be as minimal as a few broken shingles to total destruction of buildings. This report focuses on insurance claims resulting only from hail damage.

A total of 2,116,980 hail loss claims were processed from January 1, 2013 through December 31, 2015. During this period, the top five states generating hail damage claims were Texas (394,572), Colorado (182,591), Nebraska (148,346), Kansas (127,963) and Illinois (120,513). The top five months, on average, when the most hail loss claims were reported during this period were May (165,087), April (149,040), June (129,085), March (61,072) and July (55,650).

Download the complete NICB hail loss claims report here.

Enduring a hail storm is challenging enough, but property owners must also be aware that in the wake of any severe storm, they may be visited by unethical contractors posing as sincere repairmen. Often, these “storm chasers” will descend on disaster areas and go door to door offering their repair services. Although most are honest, some are not. If the dishonest ones get your money in advance of performing any work, you’ll never see them or your money again.

That’s why NICB reminds consumers to always check first with their insurance company before signing any documents presented by a contractor whom you did not request to appear. It’s why we say, “If you didn’t request it, reject it.”

NICB has produced a new public service announcements on contractor fraud that can be seen here and here.

The following tips are also helpful:

  • Get more than one estimate
  • Don’t be pushed into signing a contract right away
  • Get everything in writing
  • Require references and check them out
  • Ask to see the contractor’s driver’s license and write down the number and the license plate on his or her vehicle.

More consumer protection information is available in our library of brochures.

Fraud Files: Severe Storms Slam the South

Enduring a hailstorm is challenging enough, but property owners must also understand that in the wake of a severe storm, they may be visited by unethical contractors posing as sincere repairmen. Often, these characters will descend on disaster areas and go door to door offering their repair services. Although most are honest, some are not. If the dishonest ones get your money in advance of performing any work, you’ll never see them or your money again.

NICB urges storm victims to work with their insurance company and to be careful in selecting a contractor to do repairs. Do not allow someone to force you into signing a contract or paying up front for work or supplies.

More consumer protection information is available here.

How to Avoid Post-Disaster Scams

As Texas and parts of the South-Central U.S. recover from widespread flooding and hail damage, the National Insurance Crime Bureau (NICB) reminds consumers to beware of buying flood-damaged vehicles and falling victim to unscrupulous home repair contractors.

The worst losses occurred in Texas where hail caused an estimated $600 million worth of insurance claims for damage to homes and autos.

Car Sales Fraud

As with all major natural disasters, NICB assists law enforcement agencies, insurance and car rental companies with identifying and cataloging water-damaged vehicles to keep them from being resold to unsuspecting consumers.

Already, authorities estimate that thousands of vehicles may have been flooded.

“NICB agents see it time after time. Natural disasters bring out dishonest salvage dealers who don’t tell you that the vehicles they’re selling are heavily water-damaged,” said NICB President and CEO Joe Wehrle.

“Consumers need to know that these vehicles may appear advertised for sale without any indication that they were affected by the flooding. As always, buyers should be careful when considering a used vehicle purchase in the weeks and months following a disaster like this.”

To help avoid buying a vehicle that has been declared salvage (including flood-damaged vehicles), NICB recommends that buyers take advantage of its free online service called VINCheckSM. VINCheck contains vehicle data from insurance companies representing about 88 percent of the personal auto insurance market and lets buyers see whether a vehicle has ever been declared as “salvage” or a total loss. It also alerts users if a vehicle has been stolen and is still unrecovered.

Home Repair Fraud

In the weeks ahead, homeowners in disaster areas should be alert to the potential for fraud by unscrupulous contractors and home repair businesses.

Roofer“Fraud is an unfortunate reality in post-disaster environments,” said Wehrle. “As any recovery gets underway, fraudsters often converge on affected areas to scam disaster victims out of their money while promising to do repairs. The last thing victims of disaster need is to be victimized again.”

After a disaster, contractors often go door-to-door in affected neighborhoods offering clean up and/or construction and repair services. Most are reputable, but many are not. One common scheme is to pocket a down-payment and then 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 increase profit.

“If you didn’t request it, reject it”

Almost all of these scams are unsolicited—they begin with a visit from a contractor who seeks to help victims rebuild. That is why NICB recommends that “if you didn’t request it, reject it.” Before hiring any contractor, call your insurance company. 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.

Unlike other states, Texas does not require a license for a roofing contractor nor is one required for solicitation. Local jurisdictions, however, may impose certain requirements before contractors can solicit work within their boundaries. One example is the City of Garland that requires anyone soliciting for the purpose of selling or offering to sell goods or services, must first retain a solicitation permit through the Garland Police Department.

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

Consumer Resources

  • For a free brochure with tips to avoid post-disaster fraud, click here.
  • For useful checklists, including how to spot flood and salvage vehicle scams and post-disaster contractor repair schemes, click here.
  • 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.

On the Lookout For Fraud in Tornado Damaged Areas

The Dallas Morning News recently went out with the Texas Department of Insurance and witnessed firsthand their fight against roofing scams after the Dec 26th tornadoes hit the Dallas area.

Roofers

Workers are removed from a roof in Rowlett, TX for not having a permit.

As we reported yesterday, 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.

Last year the TDI received 15,000 complaints regarding insurance fraud.

The best part is that roofers are not the sharpest shingles in the box. They don’t realize as they are being interrogated by TDI police that the state insurance department has no regulatory authority over them.

Here’s a video of the disaster area as law enforcement and TDI officials were on the lookout for potential fraud.

Texas Storm Victims Warned About Post-Disaster Scams

DES PLAINES, Ill., Jan. 7, 2016 –  As Texas recovers from recent storms, the National Insurance Crime Bureau (NICB) is working with law enforcement agencies, the Texas Department of Insurance and insurance companies to warn victims about post-disaster rebuilding scams.

TexasTornado1

Tornado damage in Rowlett, TX

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.

TexasTornadoRooferUnlike other states, Texas does not require a license for a roofing contractor nor is one required for solicitation. Local jurisdictions, however, may impose certain requirements before contractors can solicit work within their boundaries. One example is the City of Garland that requires anyone soliciting for the purpose of selling or offering to sell goods or services, must first retain a solicitation permit through the Garland Police Department.

NICB was on site in the disaster area this week as law enforcement and Department of Insurance officials were on the lookout for potential fraud.

“Fraud is an unfortunate reality in post-disaster environments,” said NICB President and CEO Wehrle. “As the recovery in Texas gets underway, fraudsters are already converging on the affected areas in order to scam disaster victims out of their money while promising to do repairs. The last thing victims of disaster need is to be victimized again.”

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 flood 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.

Consumer Resources

· For a free brochure with tips to avoid post-disaster fraud, click here.

· For useful checklists, including how to spot flood and salvage vehicle scams and post-disaster contractor repair schemes, click here.

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800-TEL-NICB (800-835-6422), texting keyword “fraud” to TIP411 (847411) or submitting a form on our website. Or, download the NICB Fraud Tips app on your iPhone or Android device.

Top Insurance Fraud Stories for April 16, 2015

Here are the top fraud stories in the news today:

* Be Financially Prepared for Hurricane Season (Insurance Information Institute)

* Woman Accused of Falsely Reporting Stolen Vehicle (Cheektowaga Bee)

* Owner, auto tech charged with grand theft, insurance fraud (Lake County News)

* Florida doctor linked to U.S. senator pleads not guilty to Medicare fraud (Reuters)

* PennDOT contractor earned more than $1 million through alleged fraud (FOX 43)

* Dentist pleads guilty in $21M Medicaid fraud scheme (Westfair Online)

Tornadoes Rip Through the Midwest

Screen Shot 2015-04-10 at 8.38.59 AMAfter a disaster, contractors and others will often go door-to-door in neighborhoods which have sustained damage to offer clean up and/or construction and repair services. Most of these business people are reputable, but many are not. The dishonest ones may execute schemes to defraud innocent victims.

One such 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 not up to code in order to pocket more profit.

Almost all of these scams begin with an unsolicited visit from a contractor.  That is why we say, “If you didn’t request it, reject it.”  If you have damage from a storm, contact your insurance company first.  Your insurance company will honor its policy and will cover you for losses so there is no need to speak with a contractor who solicits your repair work—especially when you did not request it.

View our disaster fraud brochure as well as our “After the Storm” video for more tips.