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How to protect yourself from roof fraud

Property owners often fall victim to contractor fraud. In 2022 alone, the Federal Trade Commission reported totals 70,612 home-related fraud.

Of all the areas in a building that fraudsters can target, the roof is often the most vulnerable. This area is often expensive to repair and difficult to access without the right tools, making it easy for fraudsters to lie about or cause damage without the owner finding out.

However, roof fraud is preventable, and in this article we offer expert advice from the insurance fraud team at Central to help you identify, prevent and respond to this type of fraud.

JUMP FORWARD | How to protect yourself from roof fraud

This is how roof scams work

Fraudsters who carry out roofing scams want a financial payout.

In some cases, this money comes from the property owner directly for promised services that are never completed. In other situations, the scammers will follow the scam through the claims process and have a property owner submit work for reimbursement from their insurance company that is either exaggerated, overpriced or, in some cases, non-existent. In these cases, the scam turns into insurance fraud and can have harmful outcomes for the property owner and the insurance company.

Although all entrepreneur fraudsters share goal to steal money from property ownerstheir attitude towards the scam may vary.

Some may knock on your door claiming they noticed damage to your roof while working on a neighbor’s and ask if you want them to do an evaluation. Others will seek out entire neighborhoods that have experienced a natural disaster like a tornado or hailstorm and offer to help repair roof damage (whether real or imagined.)

Regardless of their approach, these fraudsters can be very dangerous, so it’s important that you as a property owner are on high alert for any suspicious behavior.

7 warning signs that you are being scammed

Here are seven key warning signs that you are the target of a roofing scam:

1. They offer a low starting bid

Watch out for quotes from a roofer that are significantly lower than other contractors. Scammers often offer low-cost work to get you on the hook, then start finding problems that greatly increase the price. This may include a need for more materials, more time to repair, more workers, etc. Other scammers may try to increase project costs due to materials suddenly increasing in price.

While unforeseen problems may legitimately occur on the job and the cost of materials may fluctuate, the contractor should not attempt to raise material costs in the middle of your project. Be sure to do your research on an organization, get quotes from more than one company before you sign anything, and remember that if it sounds too good to be true, it probably is.

2. They create or exaggerate the amount of damage

Another common tactic of shady contractors is to exaggerate or create roof damage themselves. For example, someone may come by and offer a free inspection of your roof, then intentionally improve or create damage themselves.

Avoid falling for this by contacting your insurance agent before you let anyone onto your roof.

Central policy holders, for example, have access to an industry leader fraud detection system which uses data from Geospatial Insurance Consortium to combat cases of roof insurance fraud. This group takes high-resolution, low-altitude aerial photos of policyholders’ property to help track damage and provide a historical look at a roof’s health.

Having access to this type of in-progress documentary footage not only gives policyholders insight into the merits of every claim a contractor makes, but can also be critical in helping fight a case of insurance fraud if they manage to scam you.

3. They ask for a large down payment or full upfront payment

It should be a red flag if a contractor asks for a large down payment or full payment upfront before you complete—or in many cases even begin—work on your roof. In many cases, this is a tactic to take your money and leave without ever touching your roof.

4. They use high pressure tactics

Contractors who offer you a special deal if you pay in advance or sign a contract within the next day or hour likely have ulterior motives. This is a pressure tactic to try to get you to make a rash decision without thinking it through or checking with your insurance company to make sure they are a legitimate company.

Don’t let a contractor convince you to move at a pace you’re uncomfortable with, and always take the time to do your homework before signing anything or handing over cash.

5. They use cheap or substandard materials

Fraudsters may try to maximize their profit by using the cheapest materials to repair. In these cases, the repairs they make are often purely cosmetic and do not address any underlying problems with your roof. Instead, the contractor will likely charge you full price to cover the problem, which will cost you more money in actual repairs in the long run.

6. They seem excessively interested in your insurance coverage

If a roofer asks a lot of questions about your previous claims or assures you that a claim for the current project will be honored by the insurance company before it is filed, this is a clear sign of fraud. In these cases, the contractor often plans to commit insurance fraud and pocket money at your insurance company’s expense.

A contractor may attempt to commit insurance fraud by creating two invoices for your home’s repairs, including a lower-cost invoice for the consumer and a higher-cost invoice for the insurance company. In other cases, the contractor may promise that by overbilling the insurance company, he will reimburse your deductible.

This is insurance fraud, and it could cost you significantly. Your claim may be denied for fraud and misrepresentation and may even result in prosecution.

The score: If a contractor offers to pay your insurance deductible, don’t hire them. This could be a red flag that they are planning to commit insurance fraud.

7. Your home has recently experienced storm damage

Storms draw dishonest entrepreneurs like moths to a flame. These contractors are called “storm chasers” and they travel to areas that have recently experienced bad weather.

Typically, these contractors initiate contact with a simple knock on your door or a flyer in your mailbox offering to repair or replace your roof. They may mention that they repaired a roof in your neighborhood and may give you a discount. Or they may try to convince you that they can replace your roof, even if you don’t need to, by filing an insurance claim.

Be careful – even if these contractors do some work before disappearing with your payment, the results will likely be substandard, and the lifespan of the replaced roof may be half or less of a well-engineered roof.

How to protect yourself from roof fraud

While it can be overwhelming for homeowners to learn the extent to which a scammer will rip you off, there are steps you can take to protect yourself from potential roofing scams. Below we outline seven top tips to stay ahead of fraudsters.

Tip #1: Stay informed

Follow insurance companies like Central on social media for the latest updates on scam trends and tips on how to stay diligent.

Tip #2: Engage your insurance agent

Always call your insurance agent if you need repairs or a new roof. Let them help guide you to a reputable company or, at the very least, assess the damage beforehand.

Did you know: It has companies like Central advanced systems to trace fraudulent contractors. With this system, your agent can tell you if there are any known cases of fraud associated with the contractor or company bidding on your work.

Tip #3: Learn and share the warning signs

Review the list of the seven most common warning signs above, then pass the information on to friends and loved ones. The data shows older are most often duped by insurance scams like this, so help protect them by reminding them of the risks.

Tip #4: Do your homework

Always check a contractor’s reputation – either with your insurance agent or online – before agreeing to work with them. You should also always get estimates from more than one contractor for any damage to your home to ensure there is common pricing and no one is trying to overcharge you.

In general, it is best practice to work only with licensed and bonded contractors. Before starting any roofing work, ask for copies of a contractor’s documents and references. While it may feel demanding or overly cautious, you’ll be thankful you took the time to verify that they’re a reputable contractor.

Pro tip: The Better Business Bureau is a good place to check other homeowners’ experiences with a specific contractor.

Tip #5: Always get a written contract

Ask for a contract that clearly documents all the proposed works to your property and the prices they will charge; never write contracts with forms in them.

Having written documentation of the intended work will not only prevent a shady contractor from making any drastic changes to price or scope after the fact, but can also demonstrate their intentions in court if they turn out to be fraudulent.

Tip #6: Never pay a contractor before the work is completed

Regardless of the situation, if a contractor asks for payment at the beginning of a job, it can be considered a red flag. Even if you feel the contractor is reputable, double check with your insurance agent before paying them before the work. Otherwise, they may disappear with your down payment without ever starting the job.

Remember: Never sign a certificate of completion until the work is completed and confirmed to be up to code.

Tip #7: Say no if you feel uncomfortable

If your instincts tell you something doesn’t feel right, listen to them. Don’t feel like you have to be overly polite and don’t let them pressure you into making a decision you’re not comfortable with. You always have the option to ask for time to consider your options before accepting services.

Roofing scams can drive up your insurance rates

Follow these expert tips from Central to protect yourself, prevent contractor fraud, and keep your insurance rates low.

If you suspect your contractor is involved in insurance fraud, contact the National Insurance Crime Bureau at 800.Tel.NICB (800.835.6422) or contact your Central Agent today.

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