Floods and wildfires have devastated areas of fertile land due to insurance fraud PropertyCasualty360

“Disaster recovery is a risky business, and homeowners should not be victimized twice,” NICB President and CEO David Glawe said in a release. “Unscrupulous contractors make things even more difficult because they take advantage of victims and overcharge homeowners and insurers, resulting in higher insurance costs for everyone.” (Credit: Timothy D. Easley/AP)

As wildfires and floods ravage communities across the country, law enforcement officials are being reminded to be on the lookout for suspicious individuals posing as contractors to defraud homeowners of insurance payments.

The The National Insurance Crime Bureau (NICB) said that these programs often start with unsolicited donations to help with rehabilitation after a natural disaster. This is followed by forcing homeowners to pay insurance premiums before repairs are made. Once the payments are collected, the contracts are terminated without completing the commitments.

“Disaster recovery is a risky business, and homeowners should not be victimized twice,” NICB President and CEO David Glawe said in a release. “Unscrupulous contractors make things even more difficult because they take advantage of victims and overcharge homeowners and insurers, resulting in higher insurance costs for everyone.”

In addition, some criminals will claim to be from a government agency, the NICB said. However, the Federal Emergency Management Agency does not approve contractors or loan agencies.

(Credit: NICB)

To show how these tricks can be done following a wildfire, Mercury InsuranceA special investigative agency uncovered the fraud earlier this summer after the public transporter provided large quantities of smoke and ash waste.

“When we looked at our insurers to see how we could help them and make sure we were delivering on our promise of ownership, many didn’t know the decision was made on the homeowner’s policy,” said Pete Galassi, director of the Mercury Insurance Special Researches Unit. he said in the release. “Some professional organizations don’t care about the harm they can cause and use fraud to take advantage of law-abiding homeowners who are at risk.”

A real estate agent promised “thousands of dollars” to homeowners through a series of sales pitches, including claims about a government program. Then, policyholders were tricked into believing that they would receive smoke and ash payments from insurance companies that were providing the money on behalf of the state of California.

Mercury Insurance also reported that some false adjusters ask homeowners to sign documents allowing them to take “soil samples.” However, the policyholders were signing letters of representation and a settlement agreement.

“The elderly parents of our house owners were lied to that they signed the house owner’s signature on the documents showing their standing and divorce agreements without knowing or understanding what they were signing,” said Galassi. “Policyholders have been misled by brokers who have been told that the premium will not be paid on their insurance or will not affect their premiums.”

In addition to the recommendations from the NICB above, Mercury Insurance recommends the following:

  • Do not sign any document that you do not understand and do not give your insurance information to anyone.
  • Do not allow a stranger to look or work in your house without understanding their purpose and their salary.
  • Verify government programs with government officials first before signing any documents.
  • If you have any questions about what to say, contact your insurance agent directly.

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