Avoiding Contractor Fraud

Monday May 19, 2014

Danielle600px“I can’t remember the last spring we had this much clean up to do! Here are some great tips to protect yourself while hiring a contractor.” Danielle Allen | dallen@peabodyinc.com Avoiding Contractor Fraud The average homeowner is likely to know little when it comes to the costs of materials and labor put into home repairs. Unfortunately, this makes them ripe targets for disreputable contractors who will lie about the extent of a problem in order to make money off overpriced repairs. Often, the need for such repair is heavily exaggerated, if not completely fabricated. It is important that you act shrewdly when dealing with contractors so you don’t end up paying for repairs you don’t need. Detecting Fraud It is often said that if something seems too good to be true, then it probably is. Nowhere is this advice more valuable than in dealing with contractor fraud. Look out for:
  • Contractors that contact you looking for work
  • Unsolicited, free home inspections that turn up problems you were previously unaware of or discount rates that are only being offered that day
  • Pushiness on behalf of the contractor that you commit to repairs immediately
  • Request for money in advance for supplies or equipment
Insurance Fraud One especially dangerous type of contractor fraud involves using a homeowner’s insurance to pay for unnecessary repairs. A contractor will begin the process by finding damages and then offer the homeowner a way to get them fixed for little or no cost. The contractor will then cause additional damage before informing the homeowners to file a claim with their insurance carrier. Often, the contractor will assert that the damage was caused by an accidental or weather-related incident. Homeowners are often convinced by contractors that this is an acceptable use of their insurance policy, when in fact it is a form of insurance fraud. Insurance companies are on the lookout for such behavior and will prosecute when fraudulent claims are discovered. Unfortunately, the homeowner is often the party that is found responsible, not the contractor who caused the damage. Contractors involved in such scams are careful not to do anything illegal on paper, which helps them deny involvement and divert blame toward the homeowner. Don’t hesitate to contact Peabody Insurance Agency Inc. prior to beginning work on a repair project if a contractor suggests using your insurance policy as payment. We can review your situation and advise you accordingly. Safety First Remember, if you didn’t contact them, you probably don’t need them. Be wary of any contractor that shows up at your door out of the blue and claims that your home is damaged. To ensure the problem they discovered is a legitimate concern, always get a second, third or even fourth opinion before committing to anything.

Peabody Insurance Agency Inc. www.peabodyinc.com 248-634-7731