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.
The August downpours that dumped more than 30 inches of rain in two days on parts of Louisiana have left as many as 100,000 cars and trucks damaged – and that’s only counting insured vehicles.
The National Insurance Crime Bureau (NICB), says claims reporting and vehicle recovery efforts that were initially slowed by the large scale flooding are now in full swing and, according to the state’s Division of Motor Vehicles, the numbers are much higher than originally expected.
Based on the extensive vehicle losses following Hurricane Katrina in 2005, Louisiana enacted strong measures to help protect unsuspecting consumers from buying a flood-damaged vehicle. Once an insured vehicle has been determined by the insurer to have been flood damaged it is towed to one of the auction facilities and processed with a new title that indicates it has been water damaged. In Louisiana, during an emergency like the recent flooding, the severity of flood water damage may require a Certificate of Destruction. In that case, the vehicle has to be crushed, or sold to a company that will dismantle it for parts and destroy what remains. The vehicle identification number (VIN) is entered into the state’s records, NICB’s VINCheckSM, and the National Motor Vehicle Title Identification System (NMVTIS) so that the consumers can check a vehicle history before purchasing a used car or truck.
Flooded vehicles that did not have insurance coverage are a major concern as they are frequently cleaned up to hide the damage and then sold to unsuspecting consumers with no indication of a problem. The number of uninsured vehicles that were flood damaged may be even more than the number of insured vehicles since many owners choose to drop their policy’s comprehensive coverage as the vehicle ages.
“It’s buyer beware,” said Commissioner of Motor Vehicles Karen St. Germaine, who warns those in the market for a used car both in state and across the country to do their homework before putting any money on the line.
Look for water stains, mildew, sand or silt under the carpet, floor mats, and dashboard, and in the wheel well where the spare is stored. Look for fogging inside the headlights and taillights.
Do a smell test. A heavy aroma of cleaners and disinfectants is a sign that someone’s trying to mask a mold or odor problem.
Get a vehicle history report. Check a trusted database service. You can check NICB’s free VINCheck database and the Louisiana Office of Motor Vehicle’s site. There are also reliable services that charge a small fee for history reports.
Have a trusted mechanic inspect the car’s mechanical and electrical components, and systems that contain fluids, for water contamination.
NICB and state officials, including the Louisiana State Police, work closely to pursue possible insurance fraud and vehicle theft. If you suspect fraud, call the NICB Hotline at 800-TEL-NICB (800-835-6422).
In this edition of Fraud Files we take a look at how one Houston resident allegedly tried to flood a vehicle to collect on the insurance money. Police in Houston say that the owner of a 2014 Hyundai Santa Fe deliberately tried to get rid of the SUV during the April flooding in the area.
He allegedly put a piece of concrete on the gas pedal and tied the steering wheel using the driver’s side seat belt, then he drove it into the rising flood waters. NICB assisted in the investigation.