When businesses and homeowners are desperate for help to repair and rebuild after a disaster such as a hurricane, tornado or wildfire, they seek assistance from anyone who will offer help. Unfortunately, there are scammers who prey on those emotions and take advantage of good people in their darkest hour.
In the wake of a hurricane, tornado, flood, fire, earthquake or other unexpected catastrophe, fraudulent unlicensed and unethical contractors can be quick to surface. Often, however, they carry warning signs to alert you. You can distinguish between a scammer and a legitimate contractor by being aware of the following things before you contract for work:
- Fake FEMA Endorsements. If a contractor claims to be endorsed or certified by the Federal Emergency Management Agency (FEMA) they are lying. FEMA does not certify or approve contractors.
- Get it in writing. Always obtain a written contract. Get everything in writing before work begins, and get multiple bids. Don’t assume the lowest bid is the best bid.
- No full payments up front. No honest contractor will demand full payment up front. Make sure you’ve agreed to a payment schedule that requires the work to be completed BEFORE the contractor receives the full balance. Using a credit card can offer some protection against scams.
- License to repair. Most contractors are required to be licensed in their respective states. Licensing requirements vary from state to state. Review the Secretary of State website for your state to verify professional licenses; Find Your Secretary of State using the search tool on the National Association of Secretaries of State website.
- Get a copy of their insurance. A reputable contractor should be able to provide you proof of insurance. If not, move on. Once you review or receive a copy of their insurance, call the contractor’s insurance company or their insurance agent to verify they have the appropriate coverage.
While there are many legitimate and honorable contractors, in times of crisis, it’s important to remain vigilant of unscrupulous people preying on those in need.
This loss control information is advisory only. The author assumes no responsibility for management or control of loss control activities. Not all exposures are identified in this article. See your local, independent insurance agent for advice on coverages and liability.