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Insurance Fraud Statistics

On June 2, 2010 the National Insurance Crime Bureau released its latest ForeCASTSM report which examines both hail loss claims and hail loss questionable claims (QCs) for the period January 1, 2006 through March 31, 2010. The full report is available on the National Insurance Crime Bureau’s website.
Here are some highlights from the report:
  • In the first half of 2010, questionable hail damage claims increased by 107 percent when compared to the first half of 2009.
  • During this time frame, the number of hail loss claims filed with insurers increased by 61 percent, from 256,000 in 2006 to over 413,000 in 2009. At the same time, the number of claims referred to NICB for suspected fraud increased by 136 percent, from 301 in 2006 to 711 in 2009.
  • “These statistics back up what our agents have been experiencing in their field investigations,” said NICB President and CEO Joe Wehrle. “There are a lot of unscrupulous fly-by-night roofers and repairmen who are what we call ‘storm chasers.’ They follow the storms and deliberately try to rip off unsuspecting home owners and their insurers by making unnecessary repairs or deliberately inflicting intentional damage to a roof or siding to try to get insurance money.
  • “The increase in questionable hail loss claims shows that insurers are on the lookout for these scam artists, and home owners need to be leery of companies offering a free roof without first checking with their insurer to ensure there is legitimate damage and the repair company is reputable.”
  • “We’ve been actively involved with our members and law enforcement in pursuing suspected unscrupulous roofing companies that take advantage of storms to fake or deliberately cause damage to roofs in an effort to get insurers to pay for a replacement roof that wasn’t damaged by a storm.”
The S.C. Insurance News Service mentions a couple of interesting facts from the Attorney General’s 2009 report on insurance fraud.
By far the largest number of complaints came from automobile insurance fraud, at 493 of the 834 total (59 percent). Personal/commercial property fraud was next most common, at 13 percent of the total, followed by workers’ comp (10 percent) and health/medical (9 percent). Cases have been reported from all over the state and the 335 files opened break down by region as follows:
  • Low Country: 30% (102)
  • Piedmont : 24% (79)
  • Midlands: 24% (82)
  • Pee Dee: 22% (72)
  • Richland County reported the largest number of complaints made, with 88, in an amount of $1,628,174.
  • Greenville County had the largest dollar value of fraud reported, with $2,226,496 (63 complaints).
Severe storms this year throughout South Carolina have damaged homes, cars, and businesses. The links to the right go into greater detail about dates, locations, and damage checklists for hail and wind storms in the Upstate SC area in 2010.
Also, view more information on Filing an Insurance Claim or view a list of Trusted Insurance Agencies.

All You Need To Know.

In Particularly – Hail Damage Scams

According to the National Insurance Crime Bureau, in the first half of 2010 questionable hail damage claims increased by 107 percent when compared to the first half of 2009.
Both WSPA and WYFF4 have broadcasted news reports of roofing companies in Upstate SC soliciting homeowners with phone calls and direct mail postcards, offering free roof inspections along with advice on how to get a “free roof”.

Here’s what you need to watch out for:

  • Beware of “storm-chaser” companies that are not locally-based. They troll the country after hailstorms looking for business. After the work dries up they leave town and you might have difficulty contacting them or getting them to come back if you have subsequent problems with the work they did.
  • Beware of signs advertising “Want a free roof?”
  • Beware of any company whose main pitch is that you can get a new roof paid for by the insurance company.
  • Companies may not explain that you have to pay a deductible to get the repair or replacement done.
  • A brochure may be left on your doorknob or in your mailbox telling you that catastrophic hail and windstorms struck the area and you may have severe damage to your roof. The roofing company may offer to help you get your insurer to pay for a new roof.
  • What does “a free roof” really mean? Here’s how it works. The contractor tells you there is hail damage from a recent storm, and that his company will waive the cost of the deductible the homeowner will pay his or her insurance company. That means the individual gets a “free roof.”
  • If they want you to sign something before they get on the roof, be extremely careful because you may be signing a contract.
  • If someone suggests that you can “make money” on the roof replacement, that may be insurance fraud. Insurance companies are monitoring claims to protect themselves and their policyholders, because of losses sustained in the last few years.
  • If they pressure you to “hurry up or you’ll miss the insurance deadline”, don’t even talk to them. And don’t do anything until you talk to your insurance agent.
  • Watch out for phrases like: “insurance companies are compensating homeowners”, or “most homeowners in this area are unaware of the damage on their roof”.
  • If a roofer is willing to commit fraud against the insurance company, can you trust that he will do what he says on your roof?
  • Fraudsters will sometimes climb on a roof and cause intentional damage by using a ball-peen hammer or small rocks to tap the shingles to fabricate hail damage. Hail damage is random, and insurance adjustors can tell the difference between genuine hail strikes versus somebody who has taken a hammer and caused intentional damage.

Some things to consider:

  • While hail insurance claims have gone up 61 percent since 2006, hail fraud claims have jumped by more than 130 percent.
  • Get independent verification of a hailstorm in your neighborhood. The National Weather Service or your local meteorologists have this information, and you should also talk to your neighbors.
  • Homeowners should know that hail storms large enough to cause damage are a matter of record by the National Weather Service and by private weather information gathering businesses that insurers use for detailed information on storm locations, movement and severity.

After a storm:

According to the National Insurance Crime Bureau, in the first half of 2010 questionable hail damage claims increased by 107 percent when compared to the first half of 2009.
Both WSPA and WYFF4 have broadcasted news reports of roofing companies in Upstate SC soliciting homeowners with phone calls and direct mail postcards, offering free roof inspections along with advice on how to get a “free roof”.
  • Look around your property. Is there evidence of hail damage to vehicles, the air conditioning unit, gutters and siding on your home, and plants? If there is no collateral damage around your property, you may not have serious roof damage either.
  • You should be aware of which way the storm was moving. Most residential homes are not built with flat roofs, but instead have angles or pitches which means if there is any damage from hail, it is likely that the angles of the roof facing the storm would be more prone to damage, not the opposite side.
  • Don’t rush into signing a contract with a roofing company. Insist on written estimates for the work.
  • Review & Investigate the track record of any roofer or contractor you consider hiring. Look for companies with a good reputation in your community, get references and don’t give anyone a deposit until you are sure they are reputable.
  • Watch out for companies going door-to-door or leaving hangers on your doorknob. Companies that do this are not necessarily bad … they may be doing work in your neighborhood and just alerting neighbors to stop by the job site to ask questions. But some storm chaser companies hire temporary employees to canvass neighborhoods trying to generate roofing leads. Ask how long the people have worked for the company, and/or whether the company has a local office and if so, where is it located?
  • Someone’s word should not be the only deciding factor when determining whether there is enough damage to justify a roof replacement.
  • The pattern of hail damage is usually random across the expanse of your roof. Damage that appears to be concentrated in one or two areas may be man-made. Fraudulent companies have been known to use rocks or ball-peen hammers to simulate hail damage. Phony damage can also be applied to the siding of a home as well.
  • Hail damage does not always require an entire new roof.
  • Roof scammers emphasize how the homeowner gets a new roof paid for by the insurance company. These scammers damage the reputation of honest contractors by duping homeowners who are unable to judge the amount of real damage or even if real damage occurred.

Schedule a Roof Estimate

  • An experienced roofer with a trained eye can identify hail damage that you might have missed.
  • Schedule a time when you can be there for the inspection.
  • Ask for feedback about the claims process; share any notes you made during your initial walk-around.
  • Get a detailed, written estimate for everything. We provide free estimates with no sales pressure.
  • Ask for proof of licensing and liability insurance (we carry $2 million, more than most companies).
  • Verify the name and address of the business.
  • Ask for references. You can read more than sixty (100) of our Upstate SC references & ratings.
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