Helpful Guidance To Avoid Contractor Fraud

Recent windstorms have caused significant damage and power outages across our area. We know situations like this can be stressful and disruptive for many homeowners.

As you begin assessing your property and deciding next steps, here are a few important things to keep in mind.

Insurance Policies Have Changed in Recent Years

Over the past several years, insurance companies across the country have made changes to homeowners policies due to the increasing cost of severe weather claims.

Some of the most common changes include:

Higher Wind or Hail Deductibles

Many policies now use percentage-based deductibles for wind or hail damage. For example:

• A 1% deductible on a home insured for $300,000 equals a $3,000 deductible.

This means homeowners may have higher out-of-pocket costs before insurance coverage applies.

Roof Depreciation or Actual Cash Value Coverage

Some policies now settle roof claims using Actual Cash Value (ACV) rather than full

replacement cost.

This means the claim payment may be reduced based on the age and condition of the roof. Older roofs may have significant depreciation applied.

In some cases, roofs may also have coverage limitations or exclusions depending on age or condition.

Understanding these changes is important when evaluating storm damage claims.

Be Careful of Storm-Chasing Contractors

After major storms, it is common for out-of-area contractors—often called “storm chasers”—to arrive quickly and offer to inspect damage or handle insurance claims.

While some contractors may be legitimate, homeowners should be cautious before signing any agreements.

Why This Matters

Some contractor agreements may:

• Give the contractor exclusive rights to handle your insurance claim

• Include cancellation penalties of 15–25% of the claim amount

• Prevent homeowners from obtaining competitive repair bids

Once a contract is signed, homeowners may have limited flexibility in choosing who performs the work.

Our Advice

Before signing anything:

• Speak with your insurance company or agent

• Allow the insurance adjuster to inspect the damage

• Obtain multiple repair estimates when possible

This helps ensure you make the best decision for your property and finances.

Always Verify Contractors

If you need repairs, it’s important to work with reputable contractors.

Before work begins, homeowners should request a Certificate of Insurance from the contractor. This document confirms:

• Who the contractor is insured with

• The types of coverage they carry

• Their insurance limits

This information can be important if problems arise after the work is completed.

You should also consider:

• Hiring contractors with local references

• Checking reviews or recommendations

• Avoiding large upfront payments

Prevent Further Damage

Most insurance policies require homeowners to take reasonable steps to prevent additional damage after a loss.

Examples include:

• Placing a tarp over a damaged roof

• Boarding broken windows

• Removing a tree from the house if safe to do so

Be sure to keep receipts for any temporary repairs. These costs are often reimbursable as part of an insurance claim.

Additional Living Expenses May Be Covered

If storm damage makes your home uninhabitable, most homeowners policies include

Additional Living Expense (ALE) coverage. This coverage may help pay for:

• Temporary housing

• Hotel stays

• Increased food costs

• Other necessary living expenses

The amount and duration of this coverage vary by policy and are listed on your declarations page.

Tree Removal Coverage

If a tree falls on your home or another covered structure, insurance typically covers:

• Damage to the structure

• Removal of the tree from the structure

• Related repairs

However, if a tree falls in the yard without damaging a structure, removal may not be covered or may be limited.

Tips During Power Outages

Extended power outages can also create challenges for homeowners. To help preserve food during outages:

• Avoid opening refrigerators and freezers unnecessarily

• Keep freezer doors closed as much as possible

• Cover freezers with blankets to help retain cold air

Some policies include limited coverage for food spoilage caused by power outages.

Document Damage Carefully

If your property has been damaged, it’s important to:

• Take photos and videos of the damage

• Save receipts for emergency repairs

• Keep records of expenses related to the storm

Proper documentation can help ensure a smoother claims process.

We’re Here to Help

Storm damage situations can be stressful and confusing. If you have questions about your coverage or need assistance starting a claim, our office is here to help guide you through the process.

This article is provided for general informational purposes only. Coverage is subject to the terms, conditions, exclusions, and limits of the individual insurance policy.