Roofing Insurance Claim Fraud and Scams Issues
If you have lived within the Houston southeast metro Texas area for any length of time, you have surely encountered at least a hail storm or two. This post provides some useful information to help you steer clear of the door-knocking, storm chasers so prevalent during these times it is important for homeowners to be aware of roofing scams and insurance fraud issues that can come back to haunt you later.
If your home is ever hit with a hailstorm, you will notice that within hours of the storm, roofing contractors and “storm chasers” will show up in your neighborhood knocking on your door claiming that your roof has hail damage and offering to help. You will also find them also claiming that your roof can be replaced for free with a roofing insurance claim.
These storm chasers will often leave flyers on the doors of the homes with their contact information etc.. if the homeowner is not home. These types of companies are called roofing storm chasers and are often come from out of town as well. Some of these out of town storm chasers roofing contractors will even go so far as to contract with local roofing companies paying them commissions to use their local roofing company name.
Is Covering Your Ductable Illegal?
The storm chasers will often offer to cover your insurance deductible for you. Many homeowners want to make sure this is not illegal or committing insurance fraud. I can assure you it is illegal; however, there are some gray areas to be aware of on this subject. There are two mainly predominant ways these types of roofing fraudulent insurance scams have played out over the years, the first way being by submitting a “Fake Invoice to the Insurance Company“. A roofing company charges the homeowner one amount for roof the replacement, for example, in this case let’s use $9,000, then once the job is finished, the homeowner submits the roofing company’s revised receipt or invoice to his insurance company showing the higher amount of $10,000 which covers the $1,000 deductible (so they are not covering your deductible but the insurance company is!). The insurance company is being told that you paid $10,000 to replace your roof which you paid $9,0000 for. They keep the $1,000 for the deductible and send the $9,000 reimbursement to you or the roofer, you don’t have to pay the $1,000 out of pocket and the roofing company gets the insurance money.
This all seems like a nice winn-winn for both you as the homeowner and the roofing company who installed the new roof, right? WRONG! This roofing company and you as the customer/homeowner could end up in hot water by your insurance company for insurance fraud. if you fell for it and find out later you have been scammed, you might not only could have charges against you but lose your homeowner’s insurance! The truth of the matter is, your roofing company and yourself as the homeowner have participated in deceiving your insurance company for financial gain.
The second way is a “Yard Sign Advertising Reimbursement“. Your roofing company bills you as the homeowner for the full replacement value of the roof at the maximum amount that the insurance company will pay for replacement. A “change order” is then used to reduce the final price to the consumer/homeowner in an amount that is now equal to the deductible. The homeowner in return now agrees to advertise for the roofing company by displaying a yard sign for their services in the front yard of their home. In short, the insurance company is paying the deductible costs by being are misled with yet another roofing scam and insurance fraud situation that the homeowner fell for and is the one who will ultimately pay if caught.
Helpful Links About Roofing Insurance Scams and Licensing Requirements By State
The BBB Texas – BBB Roof Deductible Storm Chasers Could Be A Bad Idea
The Dallas Morning News – Beware Local Roofing Scams
Insurance Journal – Roofing Contractor Fraud
Roof Help – State Licensing Requirements
So, there you have it. The best thing that you can do to protect yourself from getting a fraud count against you and/or losing your homeowner’s insurance is to stay clear of any roofing storm chasers and their insurance claim scams by remembering that honesty is the best policy. This way you or your insurance company will not ultimately have to pay in the end. Pay your deductible, be grateful the insurance company is covering the major portion of your roof replacement and find a local Texas roofing company with references that are honest. As you can see that there is a lot of gray areas on this subject.