Commissioner Poizner Warns Victims To Be On The Lookout For Scams
CDI Investigators Have Already Thwarted Potential Fraud Suspects at Fire Zones
Published on Nov 22, 2008 - 7:42:05 AM

By: California Dept. of Insurance

SYLMAR, Nov. 21, 2008 - Insurance Commissioner Steve Poizner today toured the Local Assistance Center in Sylmar to make sure that insurance companies are acting quickly, paying out claims to fire survivors as soon as possible. Commissioner Poizner also urged victims to be on the lookout for unlicensed contractors and scam artists who routinely attempt to take advantage of recovering fire survivors.

"My heart goes out to the families who lost their home and their belongings to these devastating wildfires," said Commissioner Poizner. "I'm pleased to see so many insurance companies here today taking care of their customers in the wake of these destructive fires. I will make sure they continue to do so. I want to remind victims that it is vital to proceed with caution when hiring a public adjuster or contractor. Scam artists routinely swoop in to take advantage of victims following disasters like this. I urge anyone who suspects fraudulent activity to call the Department of Insurance immediately."

Since the wildfires broke out last week, CDI investigators have discovered and deterred individuals planning to conduct meetings for fire survivors that they allegedly claim are "CDI sponsored." During past catastrophes, meetings like this were held by unlicensed public adjusters attempting to take advantage of fire survivors. CDI investigators have already caught and reprimanded unlicensed public adjusters lurking around the Sylmar Local Assistance Center. Fire survivors should call the CDI at 800-927-HELP to verify whether a meeting is being sponsored by the CDI, or to check the license status of a public adjuster.

The Commissioner urged survivors to be on the lookout for several common types of fraud that occurs after a disaster: price gouging; offers of debris removal; and fraudulent charitable solicitations. It is important that fire survivors keep a diligent lookout for predators playing on the emotions of those stricken by disaster. If fraudulent activity is suspected, please contact the CDI immediately.

Commissioner Poizner offers the following tips for Sayre Fire survivors as they work to rebuild their homes and lives:

Tips for Survivors Who Have Suffered Losses

* Contact your insurance company immediately to report your loss. Follow the instructions given to you by claims personnel. Ask questions if you do not understand your adjuster's instructions. From the beginning, keep a log of the names of the people you speak with along with dates, times, and a summary of the pertinent points of each conversation.

* Act prudently to prevent further loss to your property. Insurance policies may not cover ensuing damage if you have not taken reasonable steps to protect against subsequent property damage.

* Take pictures documenting damages.

* Do not rush into repairs or rebuilding without first considering all your alternatives.

* Ask your insurance agent or company representative to help you with your claim, and don't be afraid to ask questions. Your insurer provides an adjuster at no charge to you. If you decide to work directly with your insurer, you still have the right to hire a third-party professional (e.g., public adjuster or lawyer) to help you.

* If you hire a public adjuster or attorney to help you with a claim, be certain that the adjuster is licensed and that the lawyer is in good standing. Public adjusters and lawyers will usually require a percentage of the claim settlement for their services. It is important that you understand what services are being provided and the fees that will be charged. Ask your friends, relatives, or business associates for the names of well-regarded professionals in your community.

* To verify a public adjuster's license, call the CDI.

* To learn about attorneys and standards for lawyer-client fees, or to file a complaint against an attorney, contact the California State Bar at 800-843-9053.

* Do not repair or replace your loss without first getting instructions from your adjuster, since your insurer's visual inspection of your loss may be necessary before repairs begin.

* Do not throw away damaged property until your adjuster advises you it is all right to do so.

Tips for Hiring a Contractor

After a disaster, sales people often go door-to-door, canvassing neighborhoods to generate new business. While many of these people are honest and reputable, some are not. Below is a recommended list of actions to protect against unscrupulous operators posing as legitimate contractors:

* Call the Contractors State License Board at 800-321-2752 or visit their Web site at www.cslb.ca.gov to check a contractor's license number or get further information on home and property repairs.

* Deal only with licensed contractors. Ask to see the contractor's "pocket license," together with other identification. If the person claims to be representing a contractor, but can't show you a contractor's license or home improvement salesperson registration card, call the contractor and find out if the person is authorized to act on the contractor's behalf.

* Do not do business with a contractor who does not carry the appropriate insurance coverage. If the contractor is not insured, you may be liable for accidents that occur on your property. Ask the contractor if he/she carries general liability and workers' compensation insurance. Request a certificate of insurance (COI) from the contractor that shows the name of the insurance company, policy number and policy limits the contractor carries. Contact the insurance company directly to verify information on the COI.

* Call the insurance adjuster assigned to your property damage claim and ask the adjuster to make an estimate of the damage and the probable cost to repair. This will provide you with a benchmark estimate prepared by a professional that you can use when negotiating with contractors.

* Don't rush into signing a contract. Collect business cards, interview several contractors, and request multiple bids for comparison. Make sure to read the fine print on all estimates and contracts.

* Beware of building contractors that encourage you to spend a lot of money on temporary repairs.

* Hire local, licensed contractors when possible, as it is easier to deal with a local contractor if problems develop. However, since it may not always be possible to deal with local contractors in the aftermath of a disaster, be particularly careful to thoroughly check references for out-of-town contractors.

* Get everything the contractor discusses in writing. Also, if changes or modifications occur in the contract terms, they should be acknowledged by all parties in writing.

* Never sign a contract with blanks that have not been filled in. Unscrupulous contractors may fill in the blanks later with unacceptable terms.

* Never pay a contractor for the entire project in advance or before the work is completed. California law requires that the amount of the down payment for any one improvement project, other than for construction of a swimming pool, may not exceed $1,000 or 10% of the contract price, excluding finance charges, whichever is less.

* Be especially suspicious of door-to-door sales people who make unrealistically low estimates, refuse to leave a contract overnight, or try to sell their services by playing on your emotions.

* Federal law requires a three-day "cooling off" period for unsolicited door-to-door sales of more than $25.00.

Since these wildfires broke out last week, Commissioner Poizner has taken the following steps to assist victims in their recovery efforts:

* Commissioner Poizner declared an insurance emergency to cut through the red tape and allow insurance companies to use out of state adjusters to more quickly process the sudden influx in fire claims, and help get fire survivors paid as soon as possible. Since he issued his declaration, more than 300 additional adjusters have registered to assist Southern California fire victims.

* Commissioner Poizner dispatched consumer information experts to local assistance centers in Sylmar and Anaheim to address insurance questions and concerns for Sayre and Freeway Fire victims.

* Commissioner Poizner sent CDI fraud investigators to Southern California fire zones to conduct outreach throughout the region and advise fire survivors on how to avoid scam artists who routinely target disaster zones.

* CDI investigators and staff have worked collaboratively with CAL FIRE and other local and state entities to assess and address the needs of fire survivors.

* Commissioner Poizner visited the Freeway Complex Fire and received a briefing from local fire authorities. He also visited an evacuation center at Katella High School, where he counseled fire victims on the first steps to recovery.

* Commissioner Poizner and CDI staff are in constant communication with the insurance industry to ensure that victims are receiving prompt and thorough responses from their insurance companies.

Please visit the Department of Insurance Web site at www.insurance.ca.gov. Non media inquiries should be directed to the Consumer Hotline at 800.927.HELP. Callers from out of state, please dial 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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