1. Beware of unsolicited repair offers and other red flagsAs soon as the clouds lift, "storm chasers" descend on hard-hit neighborhoods, going door-to-door offering their services. "We use the slogan, 'If you didn't request it, reject it,'" says Frank Scafidi, spokesperson for the National Insurance Crime Bureau. "If someone comes knocking on your door, they could be legitimate, but they could be very illegitimate, too." Shady, unlicensed repair people do shoddy work, use inferior materials, or collect money and leave without finishing the work. Don't let the sense of urgency to start repairs tempt you to hire someone on the spot. Get a list of recommended licensed contractors from people you trust. Other red flags:
- Contractors who claim to work for the government. The Federal Emergency Management Agency doesn't endorse contractors or loan companies.
- Repair people who don't have a company street address, only a post office box, and don't have business cards and company literature.
- People who offer to inspect your property before you've checked them out. Some bogus contractors inflict or invent damage to make more money.
- Contractors who vave rundown equipment and unprofessional appearance.
- People who try to rush you into a decision.
2. Contact your home insurance companyDon't let a contractor elbow his way in between you and your insurance company, advises the Coalition Against Insurance Fraud. Distrust contractors who say they'll work on your behalf with your insurance company to get more money for the claim or to pay the deductible.
Work directly with your own insurance company to handle the claim. Besides helping you understand your coverage, the insurance company can also point you toward reputable contractors.The Property Casualty Insurance Association of America (PCI) provides a list of toll-free claims numbers for many insurance companies on its website.
3. Get at least three estimates for repair workCompare the bids, and check whether complaints have been filed against the contractors with the Better Business Bureau, PCI says.
4. Check contractor licensing, insurance and referencesVerify that the contractor is properly insured and licensed. Contact your state or local licensing agencies. Ask the contractor for a list of references, and call them.
5. Get everything in writingA contract for the work should state everything the contractor will do, including labor and materials prices, scheduling and cleanup procedures, PCI says. Don't sign anything with blank spaces, which a shady contractor could fill in later.
6. Never pay for a lot of work upfrontMost contractors will want a reasonable down payment, PCI says, but don't pay in full until the work is completed and inspected, and don't fork over any money until the contract has been signed. AARP New York says deposits or upfront fees should not total more than 25 percent of the estimate, and you should pay them only after materials reach your home and work begins.
7. Check a used car's history before buyingAfter any major flood, some cars that were totaled by insurers are sold through auto-salvage auctions, shipped away and cleaned up to look almost new. Lurking under those shiny exteriors are all sorts of engine and electrical problems. Here's how to spot flood-damaged cars. Unscrupulous salvage operators and dealers try to sell the damaged vehicles to unwary buyers, warns the National Insurance Crime Bureau. Make sure you check a used car's history before buying.
You can check a vehicle's history by paying a nominal fee for a search of the federal National Motor Vehicle Title Information System or use the free VinCheck service provided by the National Insurance Crime Bureau.Scafidi says the NICB will work with its member insurance companies and law enforcement agencies to make sure that vehicles totaled after Sandy are entered into the federal National Motor Vehicle Title Information System and VinCheck.