In the wake of Hurricane Irma in late 2017, Florida officials issued a warning that some homeowners were being targeted in scams involving an insurance form known as an Assignment of Benefits (AOB). The Florida Office of the Attorney General has warned of hurricane-related fraud scams as well, and we previously covered the Federal Emergency Management Administration’s (FEMA) advice for avoiding scams in the wake of a hurricane.
Assignment of Benefits Fraud
With an Assignment of Benefits, you agree that your insurance company will pay your contractor directly instead of sending the proceeds of your insurance claim to you. While use of AOBs is commonplace and can help streamline the rebuilding process, it also has the potential for abuse. Contractors who obtain AOBs from homeowners may falsely inflate the cost of repairs (potentially resulting in higher premiums), tie homeowners in to using their services for additional work, or abandon the project after receiving payment from the insurance company.
Follow these tips to help protect yourself against AOB fraud, and contact an attorney if you have any questions about signing an Assignment of Benefits:
- Be suspicious if a contractor contacts you before you contact them.
- Don’t sign anything you don’t understand.
- Don’t give any contractor the information they need to deal with your insurance company directly.
- Seek referrals, ask for references or both before you sign anything or pay any money to a contractor.
- Seek multiple bids for the work that needs to be done to your home.
Protecting Yourself Against Other Forms of Contractor and Insurance Fraud
From unlicensed contractors seeking to collect insurance payments to insurance companies refusing to pay for damage that is clearly covered under a homeowners’ or flood insurance policy, homeowners must be vigilant to avoid becoming victims of fraud in the aftermath of a major storm. The Florida Office of the Attorney General provides these tips (among others) for protecting yourself against contractor and insurance fraud:
- Watch out for “discount” offers or contractors saying that they have “leftover” supplies from a job in your area.
- Make sure you have insurance coverage before you enter into an agreement with any contractor.
- Do not provide financial information over the phone or pay in cash.
- Be wary of anyone offering to help you fill out forms or paperwork. They may be trying to steal your personal information.
- Verify all potential contractors’ licenses with the Florida Department of Business & Professional Regulation.
- Ask all potential contractors for proof of insurance and bond information.
- Avoid paying the full amount up front or making a large deposit.
- Make sure you understand the terms of the contractor’s agreement, including your rights (if any) regarding cancellation and the contractor’s right to seek penalties.
- Do not sign a certificate of completion or make final payment until you are sure that the work has been completed properly.
- Contact the Office of the Attorney General at (866) 9NO-SCAM to find out if other homeowners have filed complaints against a potential contractor before signing a contract.
Speak With an Experienced Attorney in Confidence
If you have questions about your property damage insurance claim, please feel free to contact us for an initial consultation. One of our lawyers will be happy to help you understand your situation and make informed decisions about your claim. You can reach our Fort Lauderdale law offices at (954) 928-9568, or inquire online and we will respond as soon as possible.