Insurance Scams Loom…Think Before You Sign
Fraud is everywhere these days with more people than ever trying to make a fast buck the easy way. The same is true when it comes to insurance fraud. However there are a couple different types of insurance scams out there that aim at taking advantage of the insurance companies as well as the homeowner. For this reason it is important to ensure that residents be aware of what they are up against and know exactly how to handle the situation if it strikes.
The first type of insurance scam occurs all too often in the state of Florida and is referred to as “Assignment of Benefits”. A common scenario for this scam involves claims for water damage to a home. When homeowners contact someone to clean up the mess, the water mitigation contractor who comes out, first puts a piece of paper in your hands and won’t start work until it is signed. You, the frantic homeowner, sign, which brings about the definite possibility of problems.
Within that contract is the term “Assignment of Benefits” which means you sign the rights to your homeowner’s insurance claim to the contractor in exchange for them fixing the issue. In many cases the water mitigation company overcharges for the work and if the insurance company challenges the expenses submitted, the policyholder is caught between a rock and a hard place. You no longer have the right to try to resolve the issue with the company; you have signed that right away. Many times the damaged area is left in disrepair by the contractor during the dispute, which can take months and sometimes even years to settle. If the contractor has already completed the work and the insurance company doesn’t agree to the amount, the contractor can file a lien and foreclose on your house, unless you pay!
Another one of the biggest insurance fraud scams involves the roofing industry. Some less than credible roofing companies have recently been sending door-to-door salesman out to neighborhoods with large numbers of senior citizens or neighborhoods with older homes where a storm has hit. The roofing salesman generally pretends to award the homeowner a free “roof inspection” however what ensues is far more than an inspection. Roofing companies who engage in this scam have been known to fabricate damage on an otherwise perfectly fine roof in order to try to stir up business. Some roofing companies have gone as far as tearing off shingles to simulate wind damage, or hitting the roof with a hammer to fabricate hail strikes. It is important to be vigilant when this type of activity comes knocking, because after a thorough investigation is performed by the insurance company, the claims are usually denied due to fraud, and the homeowner is once again left on the hook for the damages or the cost of the repair.
It is extremely important that homeowners be aware of this type of activity and, in the case of a claim, call their agent or insurance carrier first to ensure that they are involved in settling the claim. Furthermore, make sure that you don’t sign any paperwork until your insurance company has inspected the damages. Having a knowledgeable and responsive agent on your side can also make a big difference in times of uncertainty. If you aren’t sure what to do, or if something seems awry, don’t make the mistake of signing your rights away.
Moore Resources is an Independent Insurance Agency located in St. Petersburg, FL and offering Homeowners Insurance, Auto Insurance, Personal Insurance and Business Insurance. Our reach extends beyond the Tampa Bay area to the entire state of Florida. Moore Resources has regionally been dedicated to serving the local residents of Pinellas, Hillsborough, Polk, Pasco, Manatee and Sarasota counties; including St. Pete, Tampa, Clearwater, Bradenton, Brandon, Dunedin, Gulfport, Lakeland, Largo, Lutz, Palm Harbor, Pinellas Park, Riverview, Ruskin, Seffner, Seminole, Temple Terrace, Tierra Verde, Town n Country, and the Gulf Coast Beaches.
Please remember that the purpose of this blog is to present general information only. It does not interpret specific policies or coverage. In order to obtain detailed information regarding your insurance, contact a licensed insurance agent.