Hurricane season has been quiet with only three tropical storms so far in 2022, but peak season activity is beginning. Colorado State University forecasts a total of 18 storms, including the three named storms that have already formed, before the season ends on Nov. 30.
More storms mean more opportunities for dishonest contractors and fraudsters to prey on homeowners in need of repairs, which is why Florida’s Insurance Consumer Advocate and insurers are working together to empower Floridians with the knowledge and resources to fight fraud and avoid becoming a victim.
Illegitimate contractors’ deception and deliberate schemes have a far-reaching impact on Floridians and the insurance market. Fraud drives up costs and leaves consumers to cover the shortage. With Florida’s property insurance market on life support, an influx of fraudulent roofing repair schemes and its corresponding wave of litigation after a disaster would be devastating for consumers.
While contractors play an integral role in the building and repair process and most are legitimate, others are looking to take advantage of homeowners in vulnerable situations after a disaster. Homeowners should watch for red flags, such as someone going door-to-door using high pressure sales tactics and demanding payment up front. Before peak hurricane season activity kicks into gear, homeowners should create a list of licensed, reputable contractors in their area.
If your home is damaged or destroyed in a storm, contact your insurer first to file your claim. Your insurer should verify the repairs are covered by your policy before you sign any contracts. Once you have established the repairs are covered, then use a licensed, insured and reputable contractor to make the repairs.
Make sure the contractor has an active, valid Florida license at www.MyFloridaLicense.com. Ask the contractor to provide proof of general liability and workers’ compensation insurance by requesting a certificate of insurance.
Before moving forward, get three written, itemized estimates and compare the bids. If one of the bids is much higher or lower than the others, that is a potential red flag. When researching contractors, check with the Florida Department of Business & Professional Regulation or the Better Business Bureau to see if any complaints have been filed against them.
Once you have decided on a contractor, get a written contract that clearly states everything the contractor will do, including prices for labor and materials. Never sign a contract with blanks that could be filled in later without your knowledge or consent. Most contractors require a reasonable down payment, but never pay in full up front and do not pay in cash. Use a check or credit card so that you have a record of payment.
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Florida’s property insurance market is experiencing significant turmoil due to excessive legal system abuse and fraud. The more we can crack down on bad actors and prevent fraud from happening, the more we can help stabilize the market for consumers long-term.
The best way to fight fraud is to be informed and prepared. Florida’s Insurance Consumer Advocate and the American Property Casualty Insurance Association have created a detailed guide for how consumers can avoid being a victim of contractor fraud and abuse. The free, printer-friendly guide is available online at www.MyFloridaCFO.com/Division/ICA/FraudPrevention. We encourage you to print the guide and keep it in a secure location with your insurance and other important documents, so it is easily accessible after a storm. Prepare as much as possible beforehand to protect yourself from fraud and make the disaster recovery process smoother.
Tasha Carter is Florida’s Insurance Consumer Advocate. Logan McFaddin is vice president of state government relations for the American Property Casualty Insurance Association.