The Insurance Information Institute (Triple-I) and the National Insurance Crime Bureau (NICB) are marking this week (May 20-24, 2024) as Contractor Fraud Awareness Week (CFAW) to highlight how homeowners can protect themselves from dishonest contractors.
“For many homeowners who are victims of contractor fraud, it has either forced delays in rebuilding or has completely halted the rebuilding process after a disaster,” said Sean Kevelighan, CEO of the Triple-I.
“The Insurance Information Institute is proud to join forces with the National Insurance Crime Bureau to educate homeowners about the common signs of fraud and to offer steps homeowners can take to ensure they are hiring a reputable contractor,” Kevelighan added.
“Contractor fraud costs hardworking Americans billions of dollars every year,” said David J. Glawe, president and CEO of NICB. “After a natural disaster, fraudulent contractors work to exploit the vulnerabilities of unsuspecting homeowners with the promise of affordable renovations, repairs, or construction projects that leave behind a trail of broken promises, shoddy workmanship, and depleted savings.”
Contractor fraud scams often start with an unsolicited visit from a contractor who claims to want to help victims rebuild. Dishonest contractors also frequently use flyers to advertise their services. However, homeowners can check up on a contractor’s credentials and reputation in multiple ways. Triple-I provides these basic guidelines that can help prevent consumers from being defrauded after a disaster:
- Ask to see the salesperson’s driver’s license and write down the license number and their vehicle’s license plate number.
- Investigate the track record of any roofer, builder or contractor you consider hiring. Look for professionals that have a solid reputation in your community. Use a local, licensed, bonded and insured contractor. You can call your local Better Business Bureau office for help. Also, get references and never give anyone a deposit until after you have thoroughly researched their background.
- Ask to see the contractor’s proof of liability and workers’ compensation insurance certificate.
- Contact your local contractor license board before signing any contract or advancing any large payments for work.
- Don’t be rushed into signing a contract with any company. Instead, collect business cards and get more than one written estimate for the proposed job. Get everything in writing including cost, work to be done, time schedules, guarantees, payment schedules and other expectations which should be detailed.
- Never sign a contract with blanks; unacceptable terms can be added later by unscrupulous contractors.
- Beware of building contractors that encourage you to spend a lot of money on temporary repairs. Payments for temporary repairs are covered as part of the total settlement. If you pay a contractor a large sum for a temporary repair job, you may not have enough money for permanent repairs. In many cases, you should be able to make the temporary repairs yourself. Ask your insurance agent. And remember to keep receipts so you can be reimbursed by your insure.
- Never pay a contractor in full or sign a completion certificate until the work is finished and be sure reconstruction is up to current code.