Putting Things Back Together After a Disaster

By: AARP Education & Outreach | Source: AARP.org |  | November 9, 2005

Your home is worth a lot to you…but dishonest home contractors see the value in it, too. After disasters, people spend billions of dollars for home repairs. Usually the work is done well, but each year many homeowners are victims of poor, overpriced, or never-completed work. Some people posing as home repair specialists are simply con artists looking for easy money. Others front for predatory lenders. If you need to make repairs to your home as the result of a natural disaster, it's important to pick the right contractor and the right financing. Help is available from local and state authorities, relief agencies and repair services.  

Where Do I Make Claims?

 Report your loss and file claims: If your home or property is damaged or destroyed, contact your insurance company and report your damage or loss. If your policy or claim information was lost or destroyed, call your state Department of Insurance and they can assist you.

• Apply for FEMA disaster relief: Contact the Federal Emergency Management Agency (FEMA) if your home was damaged or destroyed. Call 1-800-621-3362 to apply for housing assistance.
• Find emergency centers: Government and community organizations are located in emergency centers in each county. Call 1-800-342-3557 to find the center closest to you.
• Employment and unemployment claims: If you lost your job due to a disaster, you may apply for Disaster Unemployment Assistance. There is also temporary work cleaning up the debris. In both cases, call the FEMA toll-free number at 1-800-342-3450.
• FEMA application and inspection: There are no fees for this service. Don't let anyone claim that you have to pay them to fill out the fo
• Keep records: Keep track of contacts and dates related to claims, inspections, names, etc.  

What Needs To Be Done? 

• You are very anxious to get your life back to normal as quickly as possible. Don't take actions too quickly. You may regret them later.
• Write a detailed description of the work you want done, including the quality of materials, brand names and model numbers you want to be used.  

What If I Need to Borrow Money For The Job?

• If you need to finance the work to be done, know how much you can afford to borrow and repay. Make a budget and stick to it.
• Be cautious of financing offered by the contractor. Dishonest mortgage brokers and contractors often work together to take advantage of  distressed homeowners.
• Get several estimates for the financing, apart from the contractor's estimate.
• Ask a lawyer or housing counselor to explain all the terms of the financing agreement.  

How Do I Find A Reliable Contractor?

• Try to get recommendations from friends, family and neighbors.
• Check with local consumer protection office or Better Business Bureau to see if there are any complaints against the contractor. But remember, even if there have been no complaints filed, that is not a guarantee of reliability.
• Have the contractor prove that he is licensed and bonded, and has insurance. Check the information with the state department that regulates businesses and professionals.
• Get two or three written estimates that give details about the work to be done, materials, labor charges, and start and finish dates.
• A clear and detailed contract can protect you if something goes wrong. In general, a contract should spell out who does what, where, when and for how much.
• Whether it is the purchase of services, materials or goods, read all contracts carefully! Wait until the job is completed before you make the final payment. Keep track of all estimates, contracts, repairs and dates of work completed.
• Do not pay cash up front. Do not make the final payment until the work is done to your satisfaction.  

How Do I Protect Myself From Crime and Scams?

• ID Theft: Watch out for any effort to obtain your personal information such as bank account numbers, PIN numbers, credit card numbers, and Social Security numbers. Criminals can use your personal information to access your accounts and much more. When giving personal information, make sure you initiated the contact or call.
• Door-to-door or telephone solicitations: Be highly suspicious of any individuals going door to door or calling with fund raising efforts, home repair scams, phony inspections, etc. Almost all of these unsolicited efforts are highly suspect. Representatives of real companies or organizations will always show identification and no cash is required.
• Price gouging: It's against the law to take advantage of consumers during a disaster or disaster recovery period. If you suspect price gouging has happened, call your state Attorney General's office.
• Advance fee loan scams: Beware of loan brokers who guarantee you a loan if you first pay a fee.  

What Are My Rights?

• You can cancel the home repair contract by sending a letter within three business days, if the contract was signed in your home or somewhere other than the contractor's permanent place of business.
• You can cancel the financing by sending a letter within three business days - and maybe even later - if your home is used as security for the loan.
• Report fraudulent activity: If you think your contractor or lender is committing fraud, notify the police, the local consumer protection agency, the state Attorney General, and state or office of banking.
• Contact a lawyer. You may be able to pursue legal action under state or federal regulations.

Take Action

• Use this worksheet to help you compare the bids you get from contractors.
• Use this worksheet to make sure all the necessary terms are in your home repair contract before you sign the contract.
• Take Advantange of the information provided by the Federal Emergency Management Agency.
• Use this worksheet to help you compare the cost and terms of home improvement loans.