NICB Warns of Insurance Scams Involving Unsolicited Service Providers

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Feb 08, 2011, 09:00 ET

If You Didn't Request It—Reject It

DES PLAINES, Ill., Feb. 8, 2011 /PRNewswire-USNewswire/ -- Each year consumers pay more for their auto and homeowners insurance policies as a direct result of fraud. We've all heard the stories—unnecessary auto glass repairs, aggressive and exorbitant towing charges, needless home repairs, total roof replacements, sinkhole damage, solicitation of accident victims — these and other kinds of insurance scams contribute to an annual loss amount estimated to be $30 billion just within the property and casualty industry.

Repair scams have one common element—a solicitation from an individual offering repair services. If a homeowner has requested an inspection or if an insurance company has authorized a vendor to conduct an inspection, that's one thing. But an unsolicited, unexpected and random "inspection" visit from a service provider, whether it's a glass repair technician, a roofer, or a structural engineer looking for sinkhole damage to your home could be the first step in a fraud scam. That is why NICB advises consumers to always consult their insurance company first before allowing anyone to perform any inspection or repair work that will be "covered" by their insurance.

Essentially, an unsolicited contact with you is a key indicator of possible fraud. When someone knocks on your door for a roof inspection and you did not request it; when you are approached at a service station by a glass repair technician offering "free" repair work; when a contractor appears at your door to provide an estimate for replacing your storm-damaged siding—all of these are potentially fraud precursors. That is why we stress, if you didn't request it—reject it.

Similarly, if you ever need a tow truck and one miraculously appears without being summoned, then be very careful before signing any documents or allowing the tow operator to take your vehicle. Certainly, there are honest and reputable tow operators who may happen upon an incident and offer their services for a reasonable fee—they're not the problem. Still, as a precaution, be wary and follow NICB's tips for such an encounter. The tips can be downloaded here: https://www.nicb.org/theft_and_fraud_awareness/checklists.

In auto accident solicitations, the innocent people involved in the accident often receive a phone call from a representative of the attorney or medical provider encouraging them to seek representation or treatment to get the care and money they deserve. In some instances, the caller may falsely represent themselves as being from the person's insurance company. In other situations the innocent people involved in the accident can even be approached at the scene.

Not everyone who makes unsolicited contacts with homeowners or people involved in an auto accident is looking to rip you off. But it is an unfortunate sign of the times that when we find examples of repair or auto accident solicitation scams, they began with an unsolicited visit or contact.

The best time to ask questions about your coverage is before you buy it. Make sure you understand how your policies will perform in the event you need to submit a claim.

When considering home repairs, NICB recommends that consumers consider these tips before hiring a contractor:

Contact your insurance company first
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

When involved in an auto accident, NICB recommends working with your insurance company and if you do need legal representation or medical care, don't select an attorney or medical provider based on the advice of a person unknown to you.

Anyone with information concerning vehicle theft and insurance fraud can report it anonymously by calling toll-free 1-800-TEL-NICB (1-800-835-6422), texting keyword "fraud" to TIP411 (847411) or by visiting our web site at www.nicb.org.

About the National Insurance Crime Bureau: headquartered in Des Plaines, Ill., the NICB is the nation's leading not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through information analysis, investigations, training, legislative advocacy and public awareness. The NICB is supported by nearly 1,100 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $319 billion in insurance premiums in 2009, or more than 78 percent of the nation's property/casualty insurance. That includes more than 93 percent ($151 billion) of the nation's personal auto insurance. To learn more visit www.nicb.org.

SOURCE National Insurance Crime Bureau