Avoid Being Taken Advantage of After the Storm
Authored By: Partnership for Legal Access
How can I avoid being taken advantage of when I repair my house damaged by the flood?
You should take some simple steps before you hire contractors to repair your home:
To protect your insurance claim,
- Take photos to document the type and extent of the damage to your property.
- Contact your insurance carrier immediately to make a claim.
- Wait until your insurance adjuster has documented the damage and determined how much the insurance company will pay on the claim before you hire any contractors.
- Contact the Texas Department of Insurance to assist you with any questions you have about insurance claims in Texas. www.tdi.state.tx.us.
Choosing Contractors or Home Services
- Avoid anyone claiming to be "FEMA Certified." FEMA does not certify or endorse contractors or other services.
- Avoid roofers, pest control companies or other contractors who show up at your door, uninvited, seeking your business. Stick to reliable, reputable contractors and service providers who are licensed and insured.
- Get recommendations from friends, relatives, neighbors, insurance agents, or adjusters. Check with local Better Business Bureau and Home Builders Associations to see if complaints have been made against any contractor you're considering.
- Check the contractor's references. Ask for a list of recent customers and call them.
Get a written estimate. Make sure it includes any oral promises made by the contractor. Remember to ask if there's a charge for an estimate before you allow anyone into your home. Ask contractors to explain price variations. Get a copy of the final, signed contract before the job begins. A written contract, including all guarantees and representations made by the contractor will help protect you, should you have any problems. Generally, oral agreements are not enforceable.
Ask an experienced friend, relative or attorney to review a home repair contract before you sign it. If you get a loan for the repair work, be very careful about using your home as security. You could lose your home, if you aren't able to re-pay it. Consider asking an attorney to review the loan documents, as well.
Types / Quality of Repairs
- Question claims made by a contractor who tells you he can get special treatment for your construction permits.
- Get written proof that the contractor has insurance to cover general liability and workers compensation.
- Be very careful about hiring contractors who encourage you to make a large amount of temporary repairs.
- Avoid large cash deposits or payment in full before the contractor begins work. Don't hire a contractor who asks you to pay for the entire job up-front. A deposit of one- third of the total price is standard.
- Pay only by check or credit card - never cash - and don't make the final payment until after the work is finished and you are completely satisfied.
Are there other scams I should know about after the flood?
These are just a few:
When businesses raise prices during a state of emergency, and it is not based on increased cost of doing business, price gouging may be occurring. Price gouging is illegal, and has criminal and civil penalties.
To protect yourself:
- Demand reasonable charges. Remember, insurance companies will only pay for "reasonable" costs of repair.
- You can report price gouging that is occurring in Texas to the Texas Attorney General's Office at 1-800-252-8011 or you can file online at www.oag.state.tx.us.
- If you suspect fraud, waste, or abuse involving Federal Emergency Management Agency disaster assistance programs, report it to FEMA's Inspector General's Office.
Office of Inspector General
500C Street, SW
Washington, D.C. 20472
If a charity will not explain how your money will help flood victims, consider giving your donation to another organization that will. To check out a charity, visit the Better Business Bureau website at www.give.org.
Flood Damaged Vehicles
Unfortunately, after disasters that involve flooding, some dishonest people and businesses may try to sell flood-damaged vehicles without giving the vehicle history to the buyer. You should ask to see the title to the car. Check to see if the vehicle came from a flood damaged state and if the title is stamped "salvage".