Homeowner's Academy

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7 Ways to Avoid Getting Caught in a Home Repair Insurance Scam

by BROOKE GOLD HASSON | Mar 04, 2016

Filing a claim after a loss can be stressful. To avoid the hassle of having to hire a restoration contractor and coordinate repairs, many Florida homeowners seek out the help of a public adjuster. Public adjusters are insurance claims specialists who work independently from the homeowner’s insurance company, and assist in managing the repair process. 

Assignment of Benefits Abuse… A Growing Problem for Florida Homeowners

AOBLawsuitGrowthv2While most public adjusters and restoration contractors are trustworthy, we’ve seen a significant increase in Assignment of Benefits abuse cases over recent years – and it’s costing homeowners throughout the state of Florida. 

Assignment of Benefits abuse is a type of home repair insurance scam in which shady contractors team up with public adjusters and trial lawyers. After convincing the homeowner to sign a broadly worded contract, they overstate the repair bill and file a hefty lawsuit against the insurer, often leaving the homeowner caught in the middle of a claims nightmare. 

Fortunately, Assignment of Benefits abuse is preventable. Here are some simple steps you can take to avoid getting caught in the middle of a home repair insurance scam: 

1. Ask Around

Don’t hire a public adjuster or contractor based solely on an ad you saw online or in your local newspaper. Get recommendations from friends, neighbors, or nearby relatives. Before hiring a contractor, request a list of references and visit the sites to verify the quality of the work, if possible. 

2. Do Your Research

Before hiring a public adjuster or contractor, go online and research what other people are saying about them. Several complaints and a low rating are potential indicators of shady business practices. 

Verify that your public adjuster is licensed through the Florida DFS Public Record, and search the Florida Department of Business and Professional Regulation portal to confirm that the contractor you plan to use has the required license or registration.

3. Never Pay in Full Up Front

Fraud_RedFlagsPublic adjusters are typically paid after a claim is handled. Never pay in full up front, and be leery of public adjusters who only accept cash payments. If you’re asked to put down a deposit, it should be no more than 25-33 percent of the total job cost. After the work is completed, wait to make your final payment until you receive a lien waiver stating that everything has been paid for.

4. Communication is Key

Make sure your public adjuster communicates with you and keeps you well informed on fees and services. Public adjusters usually charge 10-15 percent of the total claim settlement, and your home insurance company typically will not cover these fees. Reliable public adjusters are usually more educated on policy coverages. Your public adjuster should be familiar with your policy and clearly explain what coverage and benefits you’re entitled to.

5. Get Everything in Writing

Request a written contract that includes a detailed list of the repair work to be done, costs, materials, start and completion dates, and warranty information. Carefully read the fine print and never sign a contract that you do not understand. If necessary, have your contract reviewed by an attorney first.

6. Report Fraud

Florida homeowners can cancel a home repair contract within three to five days of signing. If you suspect fraud, notify your home insurance carrier immediately and report it to the Florida DFS Division of Insurance Fraud, either online or by calling toll-free 1-800-378-0445.

7. People’s Trust Policyholders – Call Us First in the Event of a Loss

Your policy entitles you to 24/7 emergency service and covered damage repairs. In the event of a loss, Call People’s Trust First at 1-877-333-1230 for seamless, no-hassle recovery.

Our affiliate, the Rapid Response Team, will immediately be deployed to your home – 24/7 – to help mitigate damage and get the ball rolling on recovery. Rest assured, People’s Trust will be with you through every step of the recovery process.

*Rapid Response Team (FL-CGC#024735), an entity affiliated with People’s Trust Insurance Company, may coordinate or provide all repair services in conjunction with our Better Way approach. Participation in the Better Way approach requires the selection of the Preferred Contractor endorsement form, E023. Our Better Way approach is subject to policy and product terms, exclusions, and limitations. When you take advantage of the People’s Trust Better Way by opting for the Preferred Contractor Endorsement, you’ll receive access to expert restoration and repairs from our affiliated general contractor, the Rapid Response Team, including 24/7 emergency repair and mitigation, a Homeowner’s Assistance Card, a dedicated no-hassle claims hotline, and a discount on your premium. Actual rates will vary according to the unique characteristics of each insured home. Individual savings may vary. Savings not guaranteed. Availability and coverage levels of some plan features are subject to state laws and underwriting requirements. Coverages, discounts, and features subject to individual eligibility and to availability. Coverage exclusions and limitations may apply. For more information on this insurance and related programs, contact People’s Trust Insurance Company.