After a disaster, fraudsters and scam artists often arrive quickly. The Iowa Department of Insurance and Financial Services has 10 tips for how to protect yourself and your hard-earned money.
- Contact your insurance agent or insurance company representative about your options for filing an insurance claim. Your insurer will inspect and provide you with an estimate of the repairs it believes are needed and covered by your policy.
- Be sure any third parties (ex. contractors or public adjusters) you consult or hire are legitimate. Search for the company online and read reviews. Find out if there are complaints against them with the Iowa Insurance Division, Better Business Bureau, and the Iowa Attorney General’s office. Ask for references, and actually call the references!
- Before hiring a third party determine what your insurance carrier will be providing/paying.
- Discuss the actual cost of the services provided by the third party and how this would impact your insurance settlement.
- Know the warning signs of a non-reputable business or scam. A reputable business will not pressure you to make a quick decision or sign away your rights, nor will it ask you to pay money upfront.
- Learn the difference between “licensed” and “registered.” The difference is important. A licensed contractor has passed exams and met other requirements to show that they are competent. A registered contractor has only provided their contact information to a government authority.
- Get a written estimate from at least three different contractors. An estimate from a contractor that’s much lower than any of the others doesn’t mean it’s the best deal. Make sure all the estimates include the same things, and check references.
- Get a written contract. The contract should include every task and repair the contractor plans to make. It should also include start/finish dates and prices for repairs and materials. Do not sign a blank contract, as a contractor can fill it in later with whatever information they want.
- Be cautious about signing an assignment of benefits (AOB). An AOB is an agreement a policyholder signs that allows direct payment from the insurance company to the contractor/third party, WITHOUT involving or getting payment authorization from the insured property owner. This may be inserted in a contract.
- Don’t pay in full upfront. Pay in installments with a check or credit card to leave a record of your payments. Get an invoice and a receipt for each payment. Don’t pay for materials until those materials are at your residence/job site. Work with your mortgage lender as their name will be listed on the insurance claim payments.
- Educate yourself about the recovery process. Download the Post-Disaster Claims Guide (PDF)
- And finally, before you hire someone, get the following information:
- A copy of the contractor’s identification that shows the contractor’s name and the name of the business.
- A copy of the contractor’s proof of liability insurance. Make sure it shows the company’s name, phone number, and the policy number. Call the contractor’s insurance company to verify the coverage is in effect.
- A copy of the contractor’s proof of workers’ compensation insurance.
If you believe you are a victim of fraud, file a complaint at ofrs.naic.org or contact the Fraud Bureau of the Insurance Insurance Division at fraud@iid.iowa.gov. If you have an issue with your insurance company, file a complaint with the Market Regulation Bureau of the Iowa Insurance Division, at File a Complaint | Iowa Insurance Division
Source: Iowa Department of Insurance and Financial Services