Before You Sign: Unmasking Contractor Scams

Author: Clark Fennimore

Homeowners insurance is an important investment in the interest of keeping a home in good condition. Its importance has to do with many unforeseen circumstances in which professional work needs to be done on the structure of a house. One such circumstance comes from significant weather conditions that may damage the exterior and interior of a home. When such a type of weather hits an area, many homeowners in that area use their insurance to cover the needed repairs.

Consequently, there are ways that this scenario can lead to fraud, possibly at the hands of the contractor doing the work. The contractor, in such a case, often makes some type of unexpected offer to homeowners in the area about fixing their homes. Some even have a practice of looking for an area where some weather event is occurring so that they can solicit business from its residents for this purpose. They will notify the homeowner that they’ve located an area of the residence in need of repair, and convince them to file a claim with their insurance companies. However, these contractors will often create the damage themselves while the homeowner is distracted or otherwise unaware. Many of these false claims occur while a contractor is on the roof of a home. Homeowners can also commit fraud in a similar scenario, but by lying about details concerning the claim. With weather conditions as a significant type of circumstance for insurance claims, approximately 10% of claims involve fraud.

There are ways to make sure that work on one’s home is performed honestly. The initial step is contact with one’s insurer as a source of information before a contactor is even consulted. After that, a contractor is to be selected based on professional standards, such as if they have a license; consulting more than one before choosing is a good idea. Other important steps while making contact with the selected contractor include an official contract and continual awareness of the work being done. These methods give the homeowner knowledge to spot potential fraud, leading to the step of legal consultation and the involvement of a trusted investigation company if necessary.

Sources:
_{https://helpstopfraud.org/wp-content/uploads/2022/02/Homeowners-Guide.pdf} 
https://www.insurancebusinessmag.com/us/news/property/nicb-enlists-20-states-in-battle-against-contractor-fraud-490266.aspx