New Roof Goofin’ - Roofing & Construction Fraud

With storm season descending, there are some businesses that take advantage of natural disasters and damages. At Hastings, we want to help you identify fraudulent roofing companies, protect your home, and minimize financial strife.

During inclement weather, all manner of damages can occur to homes or businesses. Some of the most common claims involve hail and wind damage to roofs.

Recently, there has been an uptick in dishonest construction and roofing companies taking advantage of people affected by storms.

The different, and increasingly common, ways roofing and construction companies take advantage of storm-damaged homeowners can be:

• Claiming neighbors are getting a free roof repair and you should get one too.
• Telling a homeowner there are damages to their roof or siding, when there isn’t. If a property owner isn’t able to inspect the roof themselves, it's hard to know the extent of damages.
• Claiming there is more damage than reality.
• Starting repairs, claiming damages, without taking photos or waiting for an adjuster to review the damages.

After telling a property owner there is damage to the insured roof, many property owners file an insurance claim. Trusting the “professional," many homeowners don't double check the condition of the roof or property damage. 

Your insurance company is always there to help. When you file a claim, you have a dedicated claim adjuster, or team of adjusters, to help advocate for you. Having an adjuster review the claim and inspect the roof is an essential step in preventing fraudulent claim payments. 

Your claim adjuster may schedule an appointment to inspect the damage. Sometimes, they hire an independent adjuster to inspect the damage. Either way, they verify amount and extent of damage. 

If damage is present, the adjuster confirms the estimate only includes the damages present. This happens on any type of claim, not just roof & storm damage claims. 

Another red flag of a roofing scam is starting the work, before an adjuster is able to review damages. The issue worsens when the contractor won't take photos of the home damage or property damage. 

Insurance companies cannot review the extent and cause of damages, without photos. This is a major indicator of contractor fraud. If your insurance adjuster can’t verify the damages, they may not be able to issue full payments.

If work begins before the adjuster sees the damages, a homeowner ends up footing the bill. Many times, these roof repairs can be well above the industry standard pricing, sometimes by ridiculous margins.

Before you sign a contract, follow these steps to help identify companies that are attempting to take advantage:

• Be skeptical of roofing or construction company that representatives seek you out, especially after a bout of bad weather. 
• Don’t make any up-front payments, before work starts. Explore all of your options & talk with your agent or claims adjuster.
• Creating a sense of emergency. If a roofing company says that you should start IMMEDIATELY, always question why. If there’s extensive damages (like a hole in your roof), then a mitigation company can help. However, if there’s no imminent danger to the home, it may be time to start asking some additional questions.
• Don’t allow salespeople to bully you. If they’re pushing to start repairs prior to the insurance adjuster reviewing the damages, you have the right to say no. In some situations, an adjuster will accept photos of the damages, from the roofing/construction company, to start work. If the roofing company isn’t willing to wait OR send photos and wait for approval, start asking questions.
• Don’t accept any rebates, like the roofing company paying for your deductible. 
• Always ask for the full scope of the estimate, prior to starting work. Sometimes, damages aren't visible, until repairs have started, for example, roof decking. However, the company should be able to give you a quote for the best- and worst-case scenario, up front. If a roofing company keeps adding “unforeseen” costs, they may be trying to pad your insurance claim.

That last one directly impacts all property owners. Padding insurance claims isn’t specific to home claims, but it contributes to the larger issue of insurance fraud.

Fraudulent insurance claims total around $308 billion per year, in the U.S. alone. Those costs turn into insurance premiums for customers, raising rates between $400 and $700 per household, per year. The insurance industry is constantly trying to advocate for customers by identifying insurance fraud. However, we’re all in it together, so anything you can do to help goes a long way.

Some other considerations:

• Make sure you hire a roofing company with an active state license. Not all states require licenses for roofing companies, however, and they can be elective. Reputable companies have a license, even if it’s not required. Even better if they show proof of Workers' Compensation insurance.
• Each state has different regulations, but some allow a “Right-to-cancel.” If a claim is denied, customers have a right to cancel the contract, within 72 hours. 
• Always ask for an itemized repair estimate.
• Check to see if they are a Better Business Bureau accredited business.

When in doubt, you can always call your agent and they can help guide you. Your insurance carrier is here for YOU. If you want a second opinion on damages, and need someone on your side, you can always file a claim. 

When you have an adjuster assigned, they'll review the damages and go from there. If there’s no damage, you can withdraw with no penalties. If there is damage for a covered loss, the adjuster can help you make the beset decision for you.

Here are some additional resources to help you identify these companies & more information on insurance fraud:

• https://www.nicb.org/news/blog/roofing-fraud-requires-vigilance
• https://www.bbb.org/article/news-releases/22467-bbb-scam-alert-watch-out-for-free-roof-inspections-look-for-bbb-seal
• https://content.naic.org/insurance-topics/insurance-fraud