As those affected by Hurricane Matthew return home, state insurance regulators are warning residents to be wary of scams and report suspicious business activity.
The Florida Office of Insurance Regulation (FLOIR) is reminding residents to be “cautious of repair deals that sound too good to be true” and ask contractors and insurance professionals to show licensing and training credentials.
Florida was first to issue a statement specifically regarding fraud and predatory businesses seeking to profit from hurricane victims under financial and emotional stress. The state continues to combat the misuse of assignment of benefits practices and a catastrophe, like Hurricane Matthew, can exacerbate that problem, as well as others. The cost of homeowners insurance in Florida is already some of the most expensive in the country and policyholders should be attentive they aren't paying more than they ave to to make themselves whole again.
Below is some advice for policyholders to avoid falling for a scam or engaging in an unfavorable business arrangement.
Those with property damage losses after a hurricane frequently need to make temporary repairs to prevent further damage from occurring and are commonly targets of scams. When making temporary repairs, policyholders should demand to see proof of licensing or training credentials for any third party offering its services.
Homeowners in Florida and other states like South Carolina are likely to be approached by legitimate third-party vendors who agree to make repairs under various conditions. However, there is a possibility that unqualified vendors will solicit a policyholder as a client in a similar fashion. For that reason, it can be difficult to know who to trust, which is why asking for documentation is a necessary step in vetting third-parties.
Florida’s Department of Business and Professional Regulation allows anyone to look up contractor licenses on the department’s website and everyone should cross-check a potential third-party company with their list.
Anyone considering working with a third party can further insulate themselves from a scam by asking potential third-party hires for references. A third-party without any seemingly good references might be a red flag.
Once a policyholder qualifies a vendor on paper, they still need to make sure they have a full understanding of the third-party contract offered before agreeing to it. As mentioned earlier, not every third-party vendor is the same. Typically, agreements explicitly state either the policyholder or their insurance company is responsible for paying them. Depending on the amount of damage, some policyholders might not be able to comfortably pay a vendor out of pocket and seek reimbursement later.
To be sure they get the best claim settlement possible and to shift the time consuming responsibilities of an insurance claim on a professional, a policyholder might choose to hire a public insurance adjuster.
For a percentage of the final settlement, a public adjuster will create a detailed, professional claim, submit it for a client and handle the claims process from beginning to end. They also work to negotiate with contractors.
But like the examples regarding third-party vendors above, there are precautions policyholders need to take before hiring a public adjuster. Public adjusters are licensed – do not use any other professional, such as an attorney or contractor, for adjustment services if they are not authorized to do so.
This article first appeared in ValuePenguin.