NICB: Homeowners Should Prepare Now for Storm Season

Tips to keep damage costs down and prevent insurance fraud

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Mar 23, 2015, 06:30 ET

DES PLAINES, Ill., March 23, 2015 /PRNewswire-USNewswire/ -- With the spring storm season approaching, the National Insurance Crime Bureau (NICB) and its 1,100 member insurance companies are urging consumers to take steps now to reduce the risk of injury and keep property damage costs to a minimum by preparing a disaster plan. They should also be on the lookout for scam artists looking to take advantage of storm victims.

Basic tips in the event of a natural disaster include having at least three days' worth of food and water for every member of your family as well as a battery-powered or hand-crank weather radio. More valuable tips and information on disaster preparedness can be found at www.ready.gov.

Homeowners insurance should be part of a disaster plan

A recent report from the Insurance Research Council points out that average claim payments per insured home have risen at an annualized rate of 5.0 percent since 1997 – more than twice the rate of inflation. Larger homes, more severe storms and more expensive building materials are part of the reason why. Deductibles are up, too – another reason for consumers to take precautions that keep damage, injury and costs to a minimum.

While personal survival from a natural disaster is paramount, financial survival is important, too. Having insurance helps keep homeowners financially whole even when their home is damaged or destroyed.

Reject unsolicited contractors

Too often, disaster victims fall prey to predatory and fraudulent repair scams perpetrated by unscrupulous contractors looking to make a fast buck. They typically go door-to-door in affected neighborhoods offering clean up, construction or repair services. Most contractors are reputable, but some are not. One frequent scam involves contractors who pocket the payment but never show up to do the work or finish the job. Another scheme involves using cheap materials and performing sub-standard work in order to increase profits.

Almost always, these scammers show up unsolicited. The NICB strongly advises consumers, "If you didn't request it, reject it." Instead, call your insurance company and report the damage before hiring anyone.

Tips before hiring a contractor

NICB offers these tips before hiring a contractor:

Get more than one estimate.
Never let a contractor pressure you to hire them.
Never let a contractor interpret the insurance policy language for you.
Never let a contractor discourage you from contacting your insurance company.
Get everything in writing including cost, work to be done, time schedules, guarantees, payment schedules and other expectations.
Demand references and check them out.
Ask for and record the salesperson's driver's license and vehicle license plate numbers.
Make sure to review and understand all documents sent to your insurance carrier.
Never sign a contract with blanks to avoid unacceptable terms being added later.
Never pay a contractor in full or sign a certificate of completion until the work is finished and you have verified that it meets code requirements where you live.

For more on disaster fraud, watch this video.

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800-TEL-NICB (800-835-6422), texting keyword "fraud" to TIP411 (847411) or submitting a form on our website. Or, download the NICB Fraud Tips app on your iPhone or Android device.

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 data analytics, investigations, training, legislative advocacy and public awareness. The NICB is supported by more than 1,100 property and casualty insurance companies and self-insured organizations. NICB member companies wrote $371 billion in insurance premiums in 2013, or more than 78 percent of the nation's property/casualty insurance. That includes more than 93 percent ($168 billion) of the nation's personal auto insurance. To learn more visit www.nicb.org.

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SOURCE National Insurance Crime Bureau