BUYER BEWARE: Do not “assign claims” to contractors! Residents in Texas, Florida, and other areas hit by recent hurricanes are being warned not to assign their claims to anyone. Although we weren’t hit by a hurricane here in Michigan, this is still important advice to remember any time you have to file a claim. Policyholders who assign a claim no longer have a right to receive any payment from their insurer and all claim payments will go directly to their contractor. While this might sound like something that would make a process easier, the potential for disappointment, sub-standard work, and fraud are much higher and are not worth the risk. Imagine this scenario, if you will: You have a small kitchen fire and hire a contractor to repair the damage. You sign a form assigning the claim to your contractor. Your contractor tells you – and your insurer – about their plans and scope of work. They submit invoices for payment by your insurer, they receive payment, and then you never hear from them again. Now your kitchen is still not fixed, your insurer feels they’ve already paid your claim and won’t pay again, and you’re left footing the bill. Sounds terrible, right? It happens all the time! Insurance fraud like this causes increased rates for everyone. To avoid becoming a victim of this problem, remember these tips:
- Only hire reputable contractors.
- Get everything in writing.
- Don’t sign anything without reviewing it carefully. If you are unsure about a document, talk to your claims representative.