NICB: Don’t be Victimized Twice – Avoid Disaster Fraud

May 9, 2005

Victims of natural disasters receive millions of dollars annually from their insurance companies to help them rebuild their homes and businesses.

Unfortunately, those claim dollars often are the target of unscrupulous contractors who prey on the innocent victims of tornadoes, hurricanes, floods and wildfires, according to the National Insurance Crime Bureau (NICB).

After a natural disaster, professionals often go from door-to-door in damaged neighborhoods, offering clean up or repair services. Many of these business people are reputable. Others are not. The dishonest ones may pocket payment without completing the job or use inferior materials and perform shoddy work not up to code.

“People are often so consumed with the devastation that has occurred in their lives that they are more vulnerable to disaster fraud,” said Robert Bryant, NICB president and CEO. “If you educate yourself against dishonest contractors now, you can avoid becoming a victim of disaster fraud. A common fraud scheme is for a ‘so-called’ contractor to convince a homeowner that a large deposit must be provided before repair work can begin,” Bryant explained. “Frequently, the job will be started, but not completed and these con artists are never seen or heard from again,” he said.

Consult the following checklist before hiring a contractor:

– Get more than one estimate. Don’t be pushed into signing a contract right away.

– Get everything in writing. Cost, work to be done, time schedule, guarantees, payment schedule and other expectations should be detailed.

– Demand references and check them out.

– Ask to see the salesperson’s driver’s license and write down the license number and license plate number.

– Never sign a contract with blanks; unacceptable terms can be added later.

– Never pay a contractor in full or sign a completion certificate until the work is finished.

– Insurance coverage may be rendered void if intentional misrepresentation by a policyholder is discovered.

If one believes they have been approached by an unlicensed contractor or adjuster, or have been encouraged to fabricate an insurance claim, contact one’s insurance company or call the NICB Hotline at 1.800.TEL.NICB (835.6422).

For more information about disaster fraud, visit the NICB Web site at

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