American Property Casualty Insurance Association
  • Staff Contact: Nicole Mahrt-Ganley     
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  • June 1, 2018
  • Hail Season Warning: Montana Residents should be on the Lookout for Signs of Contractor Fraud and Abuse
  • BILLINGS, Mont. — The 2018 hail season is underway with tennis ball-sized hail causing property damage in Roundup and Musselshell County yesterday. The Property Casualty Insurers Association of America (PCI) urges residents who may need to hire a contractor to repair hail damage to be aware of the warning signs of contractor fraud and abuse. 

    “The majority of contractors are honest and above-board, but some unscrupulous contractors use storms to cash in on homeowners’ misfortune,” said Melanie Smith, PCI regional manager. “If your home is damaged by hail, don’t feel pressured to hire the first contractor that knocks on your door or sign a contract without all the information you need. The first step in the recovery process is to call your insurance agent or company and file a claim so they can verify the damage and determine what is covered.”

    Misleading advertising and the use of high-pressure tactics to get storm victims to sign contracts for work that may not be needed or covered by insurance is a growing problem. Between 2011 and 2016 the average hail damage insurance claim cost jumped 38 percent from $8,804 to $12,185 according to Lexis Nexis. 

    The Top Signs of Contractor Fraud and Abuse are:

    1. Contractors pounding on the door right after a storm.
    2. High pressure sales tactics urging homeowners to sign a contract right away
    3. Discouraging homeowners from contacting or communicating with their insurance company, agent or adjuster.
    4. Contractors not registered with state licensing board.
    5. Contractors that push a homeowner to sign a contract before the damage has been inspected and verified by the insurance adjuster.
    6. Contractors without verifiable workers compensation or liability insurance.
    7. Contractors that push a homeowner to sign an incomplete contract with blanks or spaces.
    8. Contractors that push for a Power of Attorney, so they can negotiate the settlement of your insurance claim.
    9. Contractors that push for a down payment or payment up front before work is completed and inspected.
    10. Contractors that have complaints against them with the Better Business Bureau or won’t give a homeowner references to check.

    “Homeowners should watch for these warning signs when working with a contractor,” said Smith.  “Don’t sign away your rights or be forced into a contract for work that has not been verified by your insurer because you could be left having to pay for it out-of-pocket. These simple steps can make the repair process go smoother and get your life and home back to normal.”

  • PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write $220 billion in annual premium, 37 percent of the nation's property casualty insurance. Member companies write 44 percent of the U.S. automobile insurance market, 30 percent of the homeowners market, 35 percent of the commercial property and liability market and 37 percent of the private workers compensation market.
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