"They're called storm chasers, going town to town where disaster strikes to descend on traumatized homeowners and causing more problems than they fix," says James Quiggle of the Coalition Against Insurance Fraud, an alliance of consumer groups, insurance companies and government agencies. "And they often prey on senior citizens."
Storm-chaser scams have exploded in recent years, says Frank Scafidi of the National Insurance Crime Bureau. "There seem to be more and bigger natural disasters these days. And with each one, word spreads among the criminal element that there's quick money in these scams."
Typically, they ask for upfront money on the promise of a quick repair — but then they disappear, says Quiggle. Or any repairs they do make are shoddy, possibly leaving you financially responsible. Homeowners insurance may not cover unauthorized or fraudulent repairs.
- Before hiring any post-disaster contractor, ask your insurer to survey the damage, and inquire about approved contractors. Or find names through your state's licensing agency on the National Association of State Contractors Licensing Agencies website. Click on "Get Licensing Info."
- Never hire a contractor on the spot. Verify the company through the Better Business Bureau and through past customer references. Be wary of any contractor who comes to your front door; good ones don't need to solicit work.
- Avoid the paperless contractor. Reject anyone who has no business card or company fliers (or lists a P.O. box instead of a street address).
- Get proof of a contractor's license and workers compensation insurance. Depending on the size of the job, you may want a performance bond, which protects you if work isn't done according to the contract.
- Damage or deception? Talk to neighbors about whether their homes suffered the damage your would-be contractor claims to see on yours.
- Get everything in writing, on letterhead — estimates, materials, prices, completion dates. This information, along with a copy of the contractor's driver's license, should be shared with your insurer before you sign anything.
- Deposits or upfront fees should not exceed 25 percent of the estimate. Pay them only after materials reach your home and work begins.
Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.
Updated October 29, 2012