The State Auditor and the Property Casualty Insurers Association of America hosted a workshop today on the prevention of hail fraud. The workshop is designed to educate consumers and insurance agents about contractor and insurance fraud following hail storms.
Michelle Qualls told KULR-8 that she experienced contractor fraud in June 2016 after her home was damaged during a hail storm. She said she needed several repairs done, including a new roof and new windows. “We were contacted by 7 different contractors within 3 days wanting our business. And we wanted to make sure we went with a reputable contractor. And so we checked references. We did our homework. We made sure they had a Montana contractors license. And the company we did sign a contract with, they put their sign in our yard. And they put their sign in about two-dozen other yards in our neighborhood. And we had them do the work, and right off the bat, we could tell it wasn't a good job."
Qualls explained that while the entire job was sloppy, being a victim of fraud was disappointing. "Although it's embarrassing and we don't want to admit this happened to us, we know that it happened to dozens of other homeowners in Billings. And we know that the company who did our house is still active in Billings. And they're just waiting for the next hail storm," explained Qualls.
The workshop included 10 tips on avoiding the contractors who:
- Pound on the door right after a damaging storm
- Use high pressure sales tactics
- Discourage you from contacting/communicating with your insurance company, agent or adjuster
- Are not registered with the state licensing board
- Push you to sign a contract before your insurance adjuster has inspected and verified damage
- Do not have verifiable workers compensation or liability insurance
- Ask you to sign a contract with blanks or has not been fully completed
- Suggest that you give them Power of Attorney, so they can negotiate the settlement of your insurance claim
- Require cash for a down payment or payment up front
- Do not have local references or has complaints against them with the Better Business Bureau
Matt Rosendale, the Insurance Commissioner and State Auditor, explained one of the most important things a homeowner should do is make sure they understand what exactly their insurance product is. He stated, "I would advise folks don't just look at the bottom line at what the monthly cost is for your premium for your homeowner's policy. Make sure you understand exactly what is covered and how it is covered. Whether that is a flat fee deductible, 3-thousand, 5-thousand dollars, or whether that is a percentage of the value of your entire home. That is really important to understand.”
The property Casualty Insurers also gave out their fraud prevention tips:
- Be alert for contractor fraud
- Verify insurance and licenses
- Get 3 bids and check references
- Get a written contract
- Never pay upfront
Rosendale also said the numbers on the amount of people who experience hail fraud is hard to nail down. He explained to KULR-8 that some people chalk up their fraud experience as just a part of life, so they do not report it to the commissioner's office.