Your roof is one of the most critical and expensive components of your home. As such, when you’re looking to repair or renovate your roof, it’s especially important to be wary of roofing insurance fraud. We’ll explain what insurance fraud is, common warning signs, and ways to avoid it.
What Is Insurance Fraud?
Insurance fraud is when someone deceives an insurance company to receive compensation. In most jurisdictions, it is a serious crime punishable by fines, probation, community service, and even jail time.
If you hire a contractor who creates damage so they can file an insurance claim, you as the homeowner, not the contractor, could be held responsible in the end.
Does Homeowners Insurance Pay For A New Roof?
Homeowners insurance typically covers roof damage if your roof breaks down because of a covered loss, which is a loss specifically stated in your insurance policy. For example, your policy might not cover losses due to wear and tear as this is not hurricane considered a covered loss, but a loss which was caused over time.
Most Common Roofing Scams and How To Avoid Them
There is no hard and fast way to identify roofing insurance fraud. However, here are a few scams homeowners commonly experience:
1. Full Payment Upfront
Contractors who are looking to commit fraud typically request full payment at the start of a job. The contractor will demand an advance payment for materials and request you to sign the first insurance check to them. After doing so, the “contractor” goes missing and does not complete the work requested.
How To Avoid This: In most states, the legal maximum a contractor can demand to be paid in advance is 10% of the job’s total worth. If they insist on any amount larger than this, be on guard and think twice before accepting their services.
2. Storm Chasers
The nickname “storm chasers” applies to roofing contractors who go looking for customers in areas stricken by severe weather like flooding, tornadoes, or hurricanes. The scenario begins when a storm chaser knocks on your door and offers to fix the damage to your roof at “no cost”. You then file an insurance claim so the contractor can begin working. Afterward, your contractor does little or no work and disappears.
How To Avoid This: Know when something is too good to be true. Do your research on the contractor and request local references. Be sure to get multiple estimates for your project as well.
General Protection Tips Against Roofing Insurance Fraud
Insurance fraud varies, but it still doesn’t change the fact you should research your contractor carefully. Here are the most important questions to ask your roofing contractor to help avoid fraud:
1. Always have a written contract. Be sure to examine it and ensure it contains a complete description of the project, including estimated start and completion dates as well as payment procedures.
2. Ask your contractor to explain their quality-control procedures and project supervision. Request the name of the person who is in charge, how many laborers are required, and when the project is estimated to be complete.
3. Request a roofing warranty. Be sure to read the warranty details carefully and look for any provisions with the potential to void your warranty.
4. Check to see if the contractor is a member of local, state, regional or national roofing industry associations like the NRCA.
5. Check to see if your contractor has liability insurance. Make sure their coverage is in effect for the duration of your job.
Do Your Research
By and large, the most effective way to avoid falling victim to roofing insurance fraud is to do your research. Be sure to ask your contractor all the questions you need to and call off the project if you see signs of trouble – no matter how good the deal is. If you need help getting coverage, contact a reliable and reputable insurer like Florida Peninsula Insurance company. We’ll work with you to create a policy to suit your needs and help you find assistance in the event of damage to your home.