Thursday, April 19, 2012

Storm Chasers Scammers Prey on Homeowners

Following a violent storm or tornado, home owners are left to pick up the pieces and find ways to put their homes back together. And insurance executives and legislators are warning storm victims to beware of contractors who try to get home owners to sign costly contracts before the insurance adjusters arrive.

These insurance executives are being dubbed “storm chasers” or “storm scammers,” who offer quick, costly deals to desperate home owners, USA Today reports.

Several states are considering or already have passed legislation to prevent these “storm scammers” from duping vulnerable home owners following a storm. For example, Iowa lawmakers are considering a bill that would “void repair contracts signed when the contractor represents himself as working for an insurance company, promises to rebate a deductible, or fails to give customers a disclosure about how to cancel the contract,” the USA Today reports. Lawmakers also recently added a provision for consideration to make it so that such contractors can be prosecuted under consumer fraud law. Minnesota, Nebraska, Illinois, Missouri, and South Dakota have already passed similar bills to protect home owners after storms.

"There are some very good contractors who set up their businesses to be able to respond to storms, but there are good ways to do it and bad ways to do it," Bill Good, executive vice president of the National Roofing Contractors Association, told USA Today.

To help safeguard against being scammed, home owners need to make sure the contractor is licensed in the state (if it’s required in their state) and not sign any documents that authorize a contractor to negotiate directly with their insurance company, Good says.

Source: “States Fight Back on Shady ‘Storm Chaser’ Contractors,” USA Today (April 16, 2012)

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