As the damage from disasters is tallied, a new peril may threaten homeowners -- con artists posing as contractors and public adjusters with offers of cheap labor and a quick damage fix. But for homeowners seeking repairs or needing help filing insurance claims, enlisting unlicensed help can be a costly mistake.
In the worst cases, shady contractors may disappear with the homeowner’s down payment or provide unsafe repairs. Unlicensed public adjusters can also promise more than the insurance policies cover. A promise from anyone for more money or services than what is specified in a policy could be an invitation to commit insurance fraud, a felony that costs consumers up to $40 billion a year, according to FBI statistics.
“Be aware that if you sign a contract with an outside claims intermediary, your insurer is precluded from working with you directly,” says Candysse Miller, executive director of the Insurance Information Network of California. In addition, insurers often do not pay intermediaries’ fees, which become the responsibility of the policyholder.
A call to your insurance agent or company can determine if your insurance covers your damage. Your insurer may also recommend the appropriate course of action, as well as licensed contractors with a proven track record of disaster repair.
California law requires contractors who perform work worth more than $500 be licensed and bonded, and provide customers with proper recourse if they are dissatisfied. Public adjusters must also be licensed by the state and adhere to rules established by the California Department of Insurance.
Homeowners seeking repairs can check a contractor’s license status and verify qualifications online at the Contractors State License Board or by calling (800) 321-CSLB. The agency recommends that consumers pay no more than 10 percent of the contract price or $1,000 as a down payment and receive a written contract verifying payment schedule and completion date.
Public adjusters’ licenses can also be checked by calling the Department of Insurance at (800) 927-HELP.