Fraud Protection Tips

Fire engulfs a home as it sweeps up a canyon in San Diego, Calif., Oct. 26, 2003. Wildfires are burning out of control in numerous areas around the county.
In addition to the thousands of California homes destroyed by the wildfires, thousands others have been damaged and are in need of repair. The Insurance Information Institute has put together a list of suggestions to help keep wildfire victims from being victimized again when repairs are done.

Finding your home damaged or destroyed and your personal possessions ruined by can be devastating. Unfortunately, there are unscrupulous "professionals" who prey on victims. Following are tips for consumers in the aftermath of the wildfires and what to be aware of:

Roofers or Builders
1. Don't be rushed into signing a contract with any company. Instead, collect business cards and get written estimates for the proposed job.

2. Beware of building contractors that encourage you to spend a lot of money on temporary repairs. Payments for temporary repairs are covered as part of the total settlement. If you pay a contractor a large sum for a temporary repair job, you may not have enough money for permanent repairs. In most cases, you should be able to make the temporary repairs yourself. Remember to keep receipts. Your insurer will reimburse you for these costs.

3. Investigate the track record of any roofer, builder or contractor that you consider hiring. Look for professionals that have a solid reputation in your community. You can call the Better Business Bureau for help. Also, get references and never give anyone a deposit until after you have thoroughly researched their background.

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. Frequently, the job will be started, but not completed. Unfortunately, these con artists are never seen or heard from again. When such requests or demands are made, the homeowner should deliberately and carefully investigate the credentials of the contractor, advises the I.I.I. Many jurisdictions require contractors be licensed. Check with local government offices to determine if the contractor is operating legally. Ultimately, it is the homeowners responsibility to make sure the repaired structure complies with the appropriate building, mechanical and zoning codes.

Public Adjusters and Attorneys

1. Don't make any rash decisions about hiring someone to handle your claim. Be especially wary of individuals who go door-to-door soliciting business in the aftermath of the fires. Most importantly, don't let anyone scare you into signing a contract. You don't want to be victimized by someone who is swooping into town to make a fast buck. You could end up forfeiting a significant portion of your insurance dollars.

2. Before hiring a public adjuster or an attorney, try to settle your claim directly with your insurance company. Your insurer provides an adjuster at no charge to you. Ask your insurance agent or company representative to help you with your claim and don't be afraid to ask questions. If you decide to work directly with your insurer, you still have the right to hire a third-party professional to help you.

3. If your claim is complicated and you want to hire a public adjuster or attorney, make sure he or she is qualified to handle your case. Ask your friends, relatives or business associates for the names of well-regarded professionals in your community. Also, call the state department of insurance regarding a public adjuster and your state or county bar association about a prospective attorney.

4. Understand that you will have to pay a public adjuster 15% and an attorney 30% of your total claim settlement.