If your home was damaged by Hurricane Sandy, don’t be surprised if out-of-state contractors invade your neighborhood to try to help with repairs.
Ordinarily, consumers whose homes have storm damage should reject a solicitation from an out-of-state contractor, because those contractors are more likely to be involved in repair scams than are local contractors.
But independent experts say the scope of Sandy’s damage is too much for local contractors to handle alone, which means that out-of-state contractors likely will be needed. Sandy caused an estimated $50 billion in damages in nine states and Washington, D.C., according to catastrophe-risk-assessment company Eqecat.
“The repair safety net can be stretched very thin after a major disaster such as Sandy [and] there often aren’t enough [local] contractors to help people put their lives back together again,” says James Quiggle of Coalition Against Insurance Fraud. “Out-of-state contractors can fill a useful role, but consumers need to be wary.”
Experts tell Consumers Digest that there are ways to distinguish legitimate out-of-state contractors from storm-chasing contractors who are more interested in making money than in doing quality work.
You always should contact your home-insurance company before you talk to any contractors. The insurance company will assess the property damage. You should steer clear of any contractor who claims that he/she will file a claim or work directly with your insurance company on your behalf.
Quiggle says to avoid any contractor who “tries to take over the claims process and elbow the customer out.”
You also should confirm that an out-of-state contractor is licensed and bonded in the state in which the contractor resides. A state license indicates that the contractor is trained properly, while confirmation of being bonded gives you legal leverage if you file a claim against the contractor for damage or theft that’s a result the contractor’s work. Also, the contractor’s business card should list a street address instead of a P.O. Box, because you will know where to find the contractor if you discover problems after the repair is completed.
And you never should hire a contractor who asks to be paid in full upfront or accepts only cash payment. If you pay a contractor before the work starts, the contractor could walk away before doing any work or do incomplete work, says Roger Morris of National Insurance Crime Bureau. If a contractor accepts only cash payments, it means that no proof of payment will exist, so you’ll have less leverage if you ask the contractor to redo work that was found to be faulty.
If you don’t have the capability to check a contractor’s credentials online because of a power outage, you can call your insurance company for help to find a reputable contractor, says Missy Dundov, who is a spokesperson for State Farm Insurance. Although an insurance company can’t recommend a specific contractor, it can provide a list of contractors that the company deems to be reputable.
– K. Fanuko