Don't Be Victimized Twice

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May 03, 2010, 09:00 ET

DES PLAINES, Ill., May 3 /PRNewswire-USNewswire/ -- Each year millions of Americans are subjected to random and often devastating natural disasters. Whether from wildfires, floods, mudslides, hurricanes, earthquakes, tornadoes, wind and hail storms — no part of the country is immune from Mother Nature's reach — nor her wrath.

While the nation's property and casualty insurance companies — nearly 1,100 of them are members of NICB — work hard to get victims back on their financial feet as rapidly as possible, disasters also spawn many darker, more insidious human behaviors in individuals looking to profit from others' tragedies.

The millions of dollars that insurance companies pour into a disaster area for rebuilding homes and businesses are also the target of unscrupulous individuals. After a disaster, professionals will often go door-to-door in neighborhoods which have sustained damage to offer clean up and/or construction and repair services. Most of these business people are reputable, but some are not. The dishonest ones may execute schemes to defraud innocent victims. One such scheme is to pocket the payment and never show up for the job or never complete a job that was started. Another scheme is to use inferior materials and perform shoddy work not up to code in order to pocket more profit.

Signs appear in areas that are prone to hail storms advertising that you can get a "free, new roof" when in reality, these are nothing more than enticements to give a scam artist an opportunity to cheat a homeowner and their insurance company. There is no question that hail can cause roof damage, and that is covered by a homeowner's insurance policy. But many times corrupt roofers will deliberately cause more damage than the storm — or even create damage where none existed — in order to boost their business. They frequently try to take advantage of the elderly, pressuring them to sign contracts, file claims, or pay up front for repairs.

This is insurance fraud and it's a crime. This causes all innocent people to pay for it in the form of higher insurance premiums.

If your property has been damaged or destroyed by a disaster, consider these tips before hiring a contractor:

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

If you believe you have been approached by an unlicensed or unscrupulous contractor or adjuster, or have been encouraged to fabricate an insurance claim, contact your insurance company or call the NICB Hotline at 1-800-TEL-NICB (1-800-835-6422). You may also text your information to TIP411, keyword "FRAUD" and remain anonymous if you so desire.

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 more than 1,000 property and casualty insurance companies and self-insured organizations. NICB member companies wrote nearly $343 billion in insurance premiums in 2008, or more than 82 percent of the nation's property/casualty insurance. To learn more visit www.nicb.org.

SOURCE National Insurance Crime Bureau