By Shannon Dauphin
If your roof is damaged by hail and the repairman hands you a costly estimate, there might be some shenanigans going on right over your head.
The number of questionable insurance claims involving hail damage jumped 202 percent (from 256 to 772) from 2008 to 2009 - and those are just the ones that are known. Fake roof-damage schemes are becoming a serious fraud, according to the "2009 Questionable Claims Comparison Report" issued by the National Insurance Crime Bureau (NICB). Understanding how the fraud is perpetrated is your best defense against getting hoodwinked.
Here's how it plays out: Unscrupulous roofing companies come around after high winds, hail, and the like have hit an area. They offer to fix your roof and remind you that your home insurance company will pay. But it's what they don't tell you that could be the problem.
Frank Scafidi, director of public affairs at the NICB, explains how the fraud works: "One of the most common techniques is to simply exaggerate existing damage. A homeowner might have sustained some damage to a roof during a storm, for example, but when a contractor inspects it to provide a repair estimate they often inflate the damage or actually cause more damage to obtain a higher payment from the insurance."
It isn't just contractors who perpetuate the fraud. "Sadly, it's not unusual for us to see homeowners do the same thing," Scafidi continues. The property might sustain real damage, such as wind that topples part of a fence. But the homeowner might then knock down the rest of the fence and blame the weather. "In that scenario, the homeowner is committing the fraud," says Scafidi.
If fake damage of any kind is caught by the insurance company, the claim will not be paid, the contractor might face legal action, and the homeowner is left with a serious financial problem to resolve. If the crime was perpetrated by the homeowners, they could face criminal penalties for fraud.
Scafidi points out that the fake roof damage claims are most common in Texas, Oklahoma, Kansas, and other areas that make up the nation's "tornado alley."
Red flags for homeowners
Although fake roof damage created by a questionable roofing company might be hard to spot, there are some red flags. "They should avoid a contractor who urges them to sign a contract for repair work," Scafidi says. "Homeowners should seek out more than one estimate and they should ask for references. A contractor who demands an up-front payment for the work is also a warning sign."
Unfortunately, even the most savvy homeowner can get fooled. If this happens to you, for any home-repair fraud, don't confront the offender directly.
"Try to obtain as much information about the person as possible without direct contact," Scafidi advises. If at all possible, get vehicle license numbers and identifying information on the vehicle. If you can get a company name, phone number or address, that's even better. Even a description of other people who showed up with the contractor can be helpful.
Call your insurance company to report your suspicions, and then report it to the NICB hotline at 1-800-TEL-NICB (1-800-835-6422).