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Denver & Boulder, Colorado
Historic Summer Hail Season Results in Record Number of Contractor Scam Artists
September 24, 2009

Many Coloradans are still working through the process of getting roofs repaired or replaced after a series of summer hail and wind storms pummeled thousands of homes—adding up to the state’s second most costly storm season with more than $617 million in insured losses to homes and cars. Unfortunately, insurance consumers continue to report a large number of disreputable contractors flooding into impacted areas and preying on homeowners.

With a slow start to the hurricane season and national catastrophe losses down an estimated 17 percent in the first quarter of 2009 (*Source: Insurance Services Office), Colorado has some of the largest number of property insurance claims across the country. “Claims adjusters tell us that combination has contributed to attracting record numbers of professional disaster scam artists to our state,” says Carole Walker, executive director of the Rocky Mountain Insurance Information Association. “The peak of hail season may be over, but homeowners are still dealing with the aftermath and need to make sure they don’t get victimized twice—first by Mother Nature, then by a disreputable contractor.”

The BBB Serving Denver/Boulder reports a record of more than 51,000 consumer inquiries on roofing contractors in June, July and August. August was the peak month with 23,322 inquiries to the BBB on roofing contractors—an increase of 664% from August 2008 with only 3,053 reports given. “When the storms hit, we knew the storm-chasers would quickly soon follow,” says Dale Mingilton, President & CEO, BBB Serving Denver/Boulder. “It was so very important to remind people to not rush into things and to do their homework before choosing a contractor to repair their damage.”

One major concern is homeowners being pressured by some roofers into signing an “authorization” to go up onto their roof to provide an estimate. In many cases, what they end up unintentionally signing is a contract with the roofer to repair or replace the roof. Homeowners should NOT sign anything until AFTER they are given an estimate and decide which contractor they want to hire.

Your BBB has tips on selecting a reputable contractor and the Rocky Mountain Insurance Information Association offers advice on filing an insurance claim.

BBB Advice on Selecting a Contractor:

Be very cautious of who you hire when in need of roof work. Oftentimes, unethical roofers go door-to-door or advertise roof services when they may not plan to do any work at all--or may do shoddy work. With unscrupulous contracts and high pressure sales tactics, you may be unfairly taken for your money. Please note the following tips:

  • Get more than one estimate; preferably, get three estimates before making a decision.
  • Don't be pushed into signing a contract right away.
  • Know that anything you sign--no matter what you are told--can be considered a binding contract so read very carefully before signing anything.
  • Get everything in writing. Cost, work to be done, time schedule, guarantees, payment schedule and other expectations should be detailed.
  • Demand references and check them out.
  • Ask to see the salesperson's driver's license and write down the license number. Also, take down the license plate number from the vehicle they are using.
  • Never sign a contract with blanks. Unscrupulous contractors may enter unacceptable terms later.
  • Never pay a contractor in full or sign a completion certificate until the work is truly completed.
  • Do not give a down payment unless special materials are being ordered, and even then you may consider writing the check directly to the roofer's supplier.
  • Insurance coverage may be rendered void if intentional misrepresentation by a policyholder is discovered. Don't be tempted to conspire in an insurance claim. Insurance fraud is a felony.
  • Beware of warranties offered from companies who are based out of state; question how the services will be honored.
  • Find out if the company uses their own workers or if they hire individual, third-party subcontractors. It is very important to know exactly WHO will be working on your roof and who is responsible if something goes wrong.
  • Verify applicable licensing and permits with your city and county. Do not secure the permit on your own, and make sure the permit is posted before the work begins.
  • Check out the company with the Colorado Secretary of State. This will tell you if they are registered with the state and when they were incorporated. This ensures that the company has a presence in Colorado, and is paying Colorado business taxes on Colorado revenue.

For more information: www.denver.bbb.org

RMIIA Advice on Filing Insurance Claims:

Tips to prepare for insurance adjuster's visits:

  • Your insurance company may send you a proof of loss form to complete or an adjuster may visit your home first. In either case, the more information you have about your damaged possessions—a description of the item, approximate date of purchase and what it would cost to replace or repair—the faster your claim generally can be settled.
  • To substantiate your loss, prepare an inventory of damaged or destroyed items and give a copy to the adjuster along with copies of any receipts. Don’t throw out damaged items until the adjuster has visited. You should also consider photographing or videotaping the damage. If your property was destroyed or you no longer have any records, work from memory.
  • Identify structural damage to your home and other structures such as a garage, tool shed or in-ground swimming pool. Make a list of everything you want to show the adjuster, for example, cracks in the walls and missing roof tiles. You should also get the electrical system checked. Most insurance companies pay for these inspections.
  • Get written bids from licensed contractors. The bids should include details of the materials to be used and prices on a line-by-line basis. This makes adjusting the claim faster and simpler.
  • Keep copies of the lists and other documents you submit to your insurance company. Also keep copies of whatever paperwork your insurance company gives you and record the names and phone numbers of everyone you speak to.

Important Consumer Reminder: Insurance consumers, by law, make their own choice when it comes to selecting a roofing, home repair contractor or an auto body shop to fix your car. However, make sure you hire a licensed, reputable and insured contractor and an auto body shop that provides guarantees and specific timelines on repairs. Your insurance policy has certain limits and deductibles, so find out settlement amounts before you sign off on repair costs.

For more information: http://www.rmiia.org/Homeowners/Walking_Through_Your_Policy/Settlement_Process.htm

For more consumer information on insurance topics logon to www.rmiia.org.

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About RMIIA

The Rocky Mountain Insurance Information Association is a non-profit insurance communications organization. RMIIA represents property and casualty insurers in Colorado, New Mexico, Utah and Wyoming. Please visit www.rmiia.org for more information.