Your home is a sanctuary. It’s where you go to get away from the stress of the outside world and spend time with those closest to you. Unfortunately, just because your home is a special place doesn’t mean that it is impervious to the threat of fraudulent activity. In fact, the Nebraska Department of Insurance’s Fraud Prevention Division reports that insurance scams, including homeowners insurance fraud, ranks second in America when it comes to economic crimes, behind only tax evasion. The worst part? This shady activity often comes from the people you trust most to repair or rebuild your home. To help shield you from the threat of fraud committed by contractors, here are a few simple tips for identifying, and avoiding, and a situation that could cost you far more than just your policy premium.
Be Wary of Crooked Contractors
One of the easiest ways to fall into the middle of a fraudulent scheme is to associate with the wrong type of contractors. As the Pennsylvania Insurance Fraud Prevention Authority explains in its guidelines for proper practices, many homeowners find themselves propositioned by crooked contractors to “bend the truth” on reports and claims. While these individuals might present the situation in a manner that seems beneficial at first glance, a deeper look into the suggestion quickly reveals the shady nature of the venture.
Overstating the value of the damages or intentionally increasing the repair estimates is not only an easy way to run into issues with your insurance company and policy, it’s flat out illegal. The savings you could potentially gain in the short term clearly aren’t worth the hassle that comes with being on the wrong side of the law.
Remember Your Right to Say “No”
Another tactic less reputable contractors utilize to enable fraud comes in the form of the “pushy sales pitch,” according to Citizens Property Insurance Corporation, a non-profit insurance entity created by the Florida Legislature in 2002. Chances are you’ve dealt with aggressive salesmen at the mall or around town, but these individuals take it to a whole new level. By rushing you into signing a contract and creating a tense, high-pressure environment during the walk-through and estimate phase of the process, the contractors who employ this scheme can create a situation that leads to fraudulent activity. If you’re faced with this tactic, remember you always have the right to step away and consider all your options, including other vendors.
Tread Carefully with Payments
When the time comes to pay for repairs and services, always pay directly to your insurance company or agency. As the New York State Department of Financial Services notes, crooked contractors are more than happy to try to convince you that they will handle the payment if you hand over the funds directly to them. Additionally, always request a receipt or work order once the job is done. By doing this, you can review the bill and ensure that you’ve only paid for the services rendered, and not something else that was added on at the last minute.
With these tips at the ready, you have everything you need to turn away those who would take advantage of your rights as a homeowner. While it is unfortunate that you can’t trust others to play by the rules, you’ll be thankful that you armed yourself with the knowledge to spot a sham if ever you find yourself in this potentially illegal position.