There is nothing more heart-wrenching then watching a natural disaster destroy everything you’ve worked your whole life to build. It’s one of the worst feelings of victimization because there is no one to blame. Even if you are left railing against fate, you can’t lose sight of the fact that behind that natural disaster lurks individuals who want to turn your bad luck into their good fortune.
Major tragedies produce individuals who take advantage of victims by passing themselves off as insurance claims inspectors, contractors, or insurance company representatives. Keeping this in mind, there are steps you can take to protect yourself and your family.
To help arm yourself against fraudulent individuals, the Independent Insurance Agents & Brokers of America (IIABA) has outlined five steps you should follow after a natural disaster:
- If a contractor approaches you and claims to be from your insurance carrier, but you haven’t reported a loss, be sure to verify his or her identity. Ask to see state or local licenses and write down the license numbers. Also, ask for proof that any contractors you choose have Liability and Workers Compensation insurance.
- Make sure your policy covers the types of repairs needed. If possible, have your insurance company send a representative to assess the damage and provide a probable cost to repair. This will give you a reliable basis for negotiating repairs with contractors.
- If your policies require you to obtain multiple estimates, always try to obtain two or three written repair bids. The bids should include all costs, what work will be done, schedule for completing work, and any associated guarantees. Never pay for repair bids. Most reputable contractors won’t charge you simply for bidding on your job.
- Never accept offers to increase the amount of your damage with the reasoning that it will be paid by the insurance company. This is a sure sign of a scam and you could be found guilty of committing fraud, too.
- When paying for repairs, try to have the insurance carrier pay the contractor directly. Never pay for work in advance or before completion. The contractor could disappear with your money and leave the work unfinished. Deposits should be about 20% (or less) of the total projected cost. If you do pay for the repairs yourself, pay only with a check or credit card. A contractor who demands cash might be trying to avoid paying taxes or buying legally required insurance. And, if the contractor asks for more money due to unforeseen damage or increased costs, be cautious before allowing work to continue. Make sure your insurance carrier is aware of the cost increases and agrees to payment before proceeding.
Of course, contracting isn’t the only way to make an illegal buck. The Internet provides an opportunity for the unsavory to profit from the unsuspecting. A favorite Internet scam after a large-scale tragedy is collecting charitable donations to aid those affected. Elaborate Web sites encourage you to give, but is it a well-known charity? In spite of how authentic they might appear, never give to any unrecognizable charitable organization. There are a number of well-known disaster relief agencies, like the Red Cross and Salvation Army, to whom you can contribute.
It might not be as readily apparent as the other types of scams, but natural disasters can be a huge opportunity for identity theft. During hurricanes or floods, personal and financial documents are washed out of homes and randomly scattered for thieves to find. A treasure trove of birth certificates, marriage licenses, driver’s licenses, personal checks and credit cards can fall into the hands of the unscrupulous. If you live in area that is prone to natural disasters, it is a wise idea to keep important documents in a bank vault or in a strong steel box that you can take with you in an emergency.