Safeguard yourself against storm chasers
Dealing with the inconvenience and frustration of a weather-damaged home or property can be trying enough. But a shady storm chaser can make matters worse. To protect yourself, heed these tips:
1. Be wary of door-to-door.
Drifter companies often rush to disaster areas to drum up business, so be wary of door-to-door solicitors. However, it's common for public insurance adjusters, who are licensed in 44 states, to knock on doors. Be sure to check their local licensing, reviews and references.
2. Make sure you're there.
Don't let anyone inspect your property without you present - they might fake damage with hammers or golf balls and drive up repair costs. If you haven't had a chance to vet a contractor, says Missouri Department of Insurance spokesman Travis Ford, it's probably best to deny them access to your home.
3. Keep mum on insurance coverage amounts.
When dealing with an insurance claim, it's best not to tell bidding contractors how much your policy is going to cover. Amy Bach of United Policyholders suggests first getting a "scope" of loss that outlines materials and work needed, without prices, by a trusted contractor, public adjuster or insurance company.
4. Stay calm.
Don't panic and rush into a contract or make a down payment. Even in an emergency situation, it's important to take the time to get three estimates.
5. Verify a company's contact information.
Before settling on a contractor, get the company's phone number and address and visit the physical office - but beware that some contractors set up temporary offices to appear local or use a local company's name to do business. Check for out-of-state license plates on workers' vehicles.
6. Check the credentials.
Ask to see required state or local licenses. Call the licensing board and the state attorney general to check for complaints and disciplinary actions. Consult firstname.lastname@example.org if you have questions.
7. Check the insurance and bonding.
Contact the company's insurance and bonding companies to determine whether their liability and worker's compensation policies are big enough to cover your job.
8. Don't pay too much upfront.
It's not unusual for a contractor to ask for a down payment, but be wary if they demand a large deposit upfront or require cash payment. Many contractors will ask for 30 percent down, and some states have limits, so research local requirements. Withhold at least 10 percent until the job is completed to your satisfaction.
9. Don't sign away your settlement.
Never sign over your homeowner's insurance settlement upfront. Be wary of any contractor who offers to pay or help with your deductible - Illinois Attorney General Lisa Madigan warns that this practice is insurance fraud.
10. Insist on lien waivers.
Get lien waivers from the contractor or subcontractor at the same time you make a payment for materials and work. A lien waiver constitutes proof of payment and protects you if a general contractor fails to pay subcontractors.
11. Know your rights as a consumer.
Remember that you have a legal right to cancel a contract within three business days if you signed it based on the contractor's visit to your home. After natural disasters, state or local officials may extend that time frame. Don't sign a contract with blank spaces. Obtain a signed copy.
12. Check on permits.
Make sure the company pulls necessary building permits before starting any work, and verify the name on the permit matches the company you contracted with.