When a large storm hits an area, it can attract scammers who will take advantage of people who have had their homes destroyed. These fly-by-night storm chasers will con homeowners into making a hasty decision and make off with their insurance money without doing the work. These scammers know just what to say to gain your trust. One of the best ways to prevent falling for a scam is to do your research on the company. At Interstate Roofing we are an established business and are proud to serve our communities. When the hail strikes Denver roofs, Interstate Roofing is a company you can trust.
Colorado, Texas, Missouri and other Midwest and Southern states are known for their heavy storms, bringing wind, tornadoes and hail. Increasingly, they’re also becoming known for fraudulent roofing contractors, a phenomenon in which companies prey on homeowners following major storm events and take off with their insurance money.
In Missouri, “it’s changed the landscape entirely,” said Jason Shupp, president of St. Louis-based Ferguson Roofing and past president of the Roofing and Siding Contractors Alliance (RSCA), a regional association serving Missouri and parts of Illinois. “How any contractor goes to market has changed quite a bit.”
Fraudulent storm chasers also generate a sense of urgency among homeowners that isn’t always necessary. “They have a sense that they have to move really quickly, which isn’t always the case,” Shupp said. That’s because this kind of “storm chaser” knows that they must close the deal quickly before the homeowner researches other options.
Another common tactic is the promise of waiving any applicable insurance deductibles and a cost-free roof. Many states, including Texas, have laws against contractors waiving or rebating deductibles.
It’s important to note that not all “storm chasers” are rogues. “There are legitimate companies whose entire model is moving to where the work is,” says Reid Ribble, CEO of the National Roofing Contractors Association (NRCA). If a big hail storm goes through Dallas, for example, there won’t be enough local contractor capacity to meet heightened demand. There are legitimate companies that move across the country, providing a boost of labor as needed. Legitimate storm chasers set up shop in the area for several months, meet the local licensing criteria and carry insurance.
But there’s another class of contractor that is unlicensed, uninsured and under the radar. They often walk door to door, collecting deposits or taking control of insurance claims and then disappearing. And it’s those operators that lawmakers and fellow contractors are trying to stop.
One challenge for consumers and contractors alike is there is no national governance over roofing contractors. Requirements are different in every state and even local jurisdictions — some may require a license, others a registration, and still others have no requirements at all.
In addition to those differences, insurance requirements vary by state. Some require a homeowner to have the work completed within a certain number of months after the damage has occurred, even if some repairs can wait until after contractor demand has died down.
The insurance claims process has shifted, says Steven Badger, partner at Dallas law firm Zelle LLP. Before, if a roof was damaged, the homeowner called the insurance company, an adjuster came out to do an evaluation, the homeowner hired a local contractor and the roof was replaced. With that process, most insurance claims were amicably resolved, he said.
Today, however, illegitimate “storm chasers” inject themselves into the process alongside a rising number of public adjusters, who put claims submissions together, and a growing stock of plaintiff’s lawyers. That means more claims end up in a lawsuit. (Badger says that’s the case for as many as one-third of hail claims in Texas.) Often, insurance companies will settle even the frivolous lawsuits because it’s less expensive than going to trial. Settlements, in turn, can drive up insurance costs. The increase in lawsuits has some insurance companies restricting coverage for hail damage and even leaving certain markets, he said.