Insurance Industry Representatives To Warn Residents About Contractor Fraud
(COLUMBUS) — On Wednesday, July 21, representatives from the Ohio Department of Insurance’s Fraud and Enforcement Division, the National Insurance Crime Bureau (NICB) and various Ohio insurance carriers will be going door to door in Youngstown, Boardman, Hubbard and Austintown to warn residents about unscrupulous contractors. Representatives will be passing out pamphlets to educate consumers of the various fraud schemes committed by disreputable contractors. All representatives involved with the consumer outreach initiative will be wearing special identification to prove they are a member of the insurance community.
The visit is in response to reports the Department has received from the Youngstown Better Business Bureau. In June 2009, the Youngstown area was hit by a violent storm that produced high winds and large hail. Now that the legitimate damage has been repaired, fly by night contractors, called Storm Chasers, are trying to convince people on the outskirts of those areas that they also had damage. One consumer reported she saw a contractor banging on her neighbor’s siding with a hammer to make it appear as if damage had occurred.
“Fly by night contractors come out after storms and prey on those desperate to get their homes repaired,” said Ohio Department of Insurance Director Mary Jo Hudson. “The Department wants to assure that consumers get the best quality from their insurance proceeds and that an insurance claim and repair situation does not lead to another disaster. We know that there are just a few bad apples out there, but we don’t want to see them spoiling the bunch. Anyone who chooses to misinform, mislead and deceive will be disciplined to the fullest extent.”
In the wake of damaging storms, such as a hail storm or a tornado, unscrupulous contractors tend to drift state-to-state and prey on desperate people anxious to get their property repaired and lives back in order. In one instance reported, a consumer unwittingly granted Power of Attorney to their roofing contractor. The roofer then managed to negotiate the insurance transaction and pocket the consumer’s insurance proceeds without doing the work.
Director Hudson offers these tips to Ohio consumers on how to avoid becoming a victim of contractor fraud:
- Contact your insurance company to verify benefits immediately after a disaster and so they can send an adjuster to assess any potential damage you may have incurred.
- Obtain a list of reputable contractors from your insurance carrier, the Better Business Bureau or a specialized consumer organization.
- Do not allow a contractor to inspect your property when you are not home.
- If you give a contractor permission to inspect your property, personally watch them conduct the inspection.
- Contact multiple contractors and obtain more than one estimate.
- Request references from contractors and contact the references to verify work was completed timely and to satisfaction.
- Obtain, in writing, the terms and conditions of the project.
- Avoid signing a contract until the document is reviewed fully and/or discuss the terms of the contract with a legal representative or a trusted adviser.
- Avoid signing a contract that has not been completed fully.
- Pay contractor by check or credit card, rather than in cash.
- Refrain from paying a contractor in full, or signing a completion certificate, until all work has been finished.
- Do not provide the contractor with your personal information, such as your social security number.
Ohioans who feel they are a victim of contractor fraud are encouraged to contact the Department’s Fraud and Enforcement division by calling . Ohio insurance consumers with questions and concerns about their insurance can call the Department’s consumer hotline Free information can also be obtained at .
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