Did you hear about the roofing company scam taking place throughout the state of Forida?
Roofing claims on Homeowners Insurance policies are on the rise due to roofing companies targeting certain neighborhoods where home ages and roofs are 15 to 20 years old. Although you have a 30 or 40 year shingle, most FL roofs last about 15 to 20 years on average. The heat and weather patterns play havoc on the life expectancy of the average roof in Florida's sunshine state.
Roofing companies know when roofs typically need to be replaced, so they target these neighborhoods by going into them and advising people that their roof looks like it has hail damage and they can do a free inspection to verify. To the surprise of the homeowner, the roofer comes back with news of possible damage which could lead to potential issues if not addressed.
Here is where the scam and unethical behavior comes into play. The roofing company then advises the homeowner that they deal with Homeowners Insurance companies all the time and if they would like, they can sign an assignment of benefits form, which will give them the authorization to negotiate with the insurance for the free roof replacement.
Just last month, the Department of Financial Services announced the arrest of 5 NBRC Roofing Company employees for allegedly coordinating a $525,000 insurance fraud scheme. When they have the client sign the assignment of benefits, the insurance company no longer deals with the home owner, and now deals strictly with the roofing co. In this alleged fraud case, the insurance companies paid the claims for the new roofs and the roofing companies pocketed the money and never replaced the roofs.
According to a press release from the DFS, the scam involved "visiting homeowners following a storm, convincing the homeowner's roof repairs were necessary, helping the homeowners file insurance claims for repair and finally convincing the homeowners to give NBRC the sole right to make the repairs and the assignment of benefits for the insurance claim. But once NBRC was paid for insurance claim, the repairs would not be completed and the insurance money would be pocketed by NBRC employees."
When you do an assignment of benefits, you lose your right which means you have no recourse against the roofing co if you do not like the workmanship. A lot of times, you don't find out the quality of the job until the next major rain storm. Once again by assigning the benefits you have given up your right to resolve the issue with your Homeowners Insurance company. Bad idea.
How can you prevent this from happening to you?
- Call your insurance company first when you have a claim: they can help you partner with a reputable contractor and help explain what an "Assignment of Benefits" really means.
- Read any document you're asked to sign: a contractor should only require you to sign a work authorization so if you see the phrase "Assignment of Benefit" do not sign.
- Unsavory contractors are especially prevalent after big storms when many Florida homeowners report damage. To avoid being a victim, prepare in advance by keeping a list of trusted contractors. Your insurance company may also be able to recommend experts. ASK THEM FIRST. It is to both your benefits to get quality work done at a reasonable price.
Tom Johnson - Owner
Southern Insurance Group
352-243-9000 Ext 1011