PCI says be Ready for Spring Storm Damage and Contractor Fraud

March and April bring significant hail storms causing major damage and insurance claims

CHICAGO — As the likelihood of severe spring weather, damaging hail storms and tornadoes increase, so does the possibility that victims of storm damage will be ripped off by contractor fraud, according to the Property Casualty Insurers Association of America (PCI).

After a severe weather event, insurers respond quickly to help homeowners with insurance claims and start the recovery process. Last year insurers paid out over $14 billion to policyholders following hail storms, tornadoes, thunderstorms and severe weather. However, the attraction of a quick payday from a policyholders’ insurance check frequently draws home repair scams and shady contractors.

“PCI urges anyone affected by weather events to be alert for scams or other fraudulent activity and use caution when hiring a contractor for repairs,” said Chris Hackett, director of personal lines policy for PCI. “Contact your insurance company, agent or local better business bureau for references on potential contractors and ask for certificates of liability and workers compensation before signing contracts.”

Last year NOAA reported 5,600 major hail storms across the country and nearly 75 percent of them occurred between April and July. These storms can produce significant damage to roofs, windows and siding. When property damage occurs, PCI encourages individuals to use their insurance company or agent as a resource in helping to access the services needed to handle a claim and take the proper precautions to make sure they are hiring a reputable contractor to complete the job.

PCI’s 5 Tips for Selecting Repair Contractors:

1. Be suspicious of any contractor who tries to rush you, especially on non-emergency or temporary repairs. If possible, shop around for a contractor by getting recommendations from friends and neighbors. Be wary of anyone knocking on your door offering unsolicited repairs to your home.

2. Never pay for work up front. Always inspect the work and make sure you’re satisfied before you pay.  Most contractors will require a reasonable down payment on work, but don’t pay anything until you have a written contract.

3. Get three written estimates for the work and compare bids. Check credentials with the Better Business Bureau or state attorney general’s office to see if the firm has any outstanding complaints.

4. Always have a written, detailed contract that clearly states everything the contractor will do, including prices for labor and materials, clean-up procedures, and estimated start and finish dates. Never sign a contract with blank spaces, which a crooked contractor can alter after they have gotten your signature.

5. Avoid paying with cash; use a check or credit card instead. This creates a record of your payments to the contractor.

As spring storm season begins, PCI also suggests homeowners:

1. Conduct a yearly insurance review of your insurance policy and limits

2. Talk with your insurance company or agent about purchasing additional coverage options such as flood or earthquake insurance

3. Consider things you can do to reduce damage to your property

4. Make a home inventory of your home’s contents

5. Prepare for power outages, inconveniences and scams that often occur following damaging severe weather   

About Us

PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write more than $183 billion in annual premium, 35 percent of the nation's property casualty insurance. Member companies write 42 percent of the U.S. automobile insurance market, 27 percent of the homeowners market, 32 percent of the commercial property and liability market and 34 percent of the private workers compensation market.

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Quick facts

Never pay for work up front. Always inspect the work and make sure you’re satisfied before you pay.
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Get three written estimates for the work and compare bids.
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Avoid paying with cash; use a check or credit card instead. This creates a record of your payments to the contractor.
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Quotes

PCI urges anyone affected by weather events to be alert for scams or other fraudulent activity and use caution when hiring a contractor for repairs
Chris Hackett, director of personal lines policy for PCI