Hurricane season has begun, but Louisiana residents need to know about flood insurance and contractor fraud year-round.
To that end, FEMA and the Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) are offering the following information on contractor fraud; tips on hiring a contractor; and myths about flood insurance.
CONTRACTOR FRAUD:
Attempts to scam residents can be made over the phone, by mail or email, through the internet or in person. It is important to remain alert. Con artists are creative and resourceful.
If an offer sounds too good to be true, it should be questioned. Demand for contractors to repair or replace damaged homes in Louisiana is high. Fake or unlicensed contractors may try to take advantage of the situation to scam disaster survivors.
As insurance settlements, grants and loans put homeowners in a position to pay for work on their homes, survivors need to be sure the people they hire are authorized to do the work, will complete it and will do a good job. Out-of-town scam artists may be the first to arrive at your front door after a disaster.
Do your research. To find out if a potential contractor is licensed to work in Louisiana, contact the Louisiana State Licensing Board for Contractors at Louisiana State Licensing Board for Contractors or call them at (225) 765-2301 or use Text-To-Verify at (855) 999-7896. See more at Online Contractor Search - LSLBC (louisiana.gov).
FEMA does not license or certify contractors.
Be Aware of These Contractor Scams and Warning Signs
▪ Door-To -Door Solicitations
▪ High Pressure Sales or Scare Tactics
▪ Demand for Cash, Unusually Large Down Payments or Advanced Full Payment
▪ Special Deals or Extremely Low Bids
▪ Verbal Agreements, No Written Contract
▪ Out of State, No Permanent Place of Business, No Insurance
▪ Inadequate References
Being aware of these important clues can save you from substantial financial and emotional loss. Report suspicious activity of this kind to your local police department, the FEMA Disaster Fraud Hotline at 866-223-0814, or the Louisiana Attorney General's Consumer Dispute line at 800-351-4889. You can also report the suspected fraud to the Better Business Bureau at (337) 478-6253 or visit BBB of Southwest Louisiana: Start With Trust.
Tips for Hiring a Contractor for Home Repair
Your home is a serious investment. FEMA and the Louisiana Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) suggest taking the following steps to protect your investment as you repair or rebuild your disaster-damaged home.
Plan Your Project
Detail out what you want done and who you will need to complete it. No two projects are the same and may require a specially licensed contractor.
Get 2-3 Estimates
When comparing estimates from different contractors, don't just compare the bottom-line cost. Look at the cost and quality of materials for each one. Be sure the estimate includes the total price, the materials to be used, a timetable for payments and the expected timeline for completion of the work.
Verify the Contractor’s License and Insurance
§ Get proof that the contractor you may be working with is licensed or registered. Contact your state's regulatory agency to check the status of their license. Only work with contractors who are currently licensed or registered.
§ Verify insurance. Legitimate contractors will show proof of insurance, licensing and bonding. If they don't, you could be liable for accidents on your property.
Check at Least 3 References
§ Ask your contractor for three written references. When speaking with the references ask if they were satisfied with the contractor's work and if the contractor kept to the schedule and contract terms
§ Take a picture of your contractor, their business card, vehicle and license plate.
Require a Written Contract
§ The contract should be a detailed description of the work to be done, the material to be used, and the equipment to be installed. Be sure there is a schedule of payments and a timeline for when the work will be
completed. Get any agreement in writing. Read the contract carefully, and if you don't understand every word, take it to an expert. Never sign a contract with blank spaces to be filled in.
§ Be sure you understand the contract before you sign it. Any changes that occur during the construction project should be noted in writing. Agree in advance how disputes will be handled.
Don’t Make a Down Payment
The down payment you pay for work to begin should be minimal. Beware of a contractor who is asking for a large payment so that they can purchase the materials to begin your project.
Monitor the Job in Progress
Check in regularly on the progress of the work. Any and all permits should be displayed by the contractor while the work is being done.
Don’t Make the Final Payment Until the Job is Complete
Before making the final payment make sure that you are satisfied with the completed work. Verify that any and all liens have been released.
Keep all Paperwork Related to your Job
Be sure to keep a record of all documents that pertain to your project. This includes the contract, any written changes, all bills and invoices, receipts of payments, and all correspondence with your contractor. You should also include photos of the job in progress.
During construction, if you feel that something is not right, and you cannot work it out with the contractor check with the FEMA Disaster Fraud Hotline at 866-223-0814, or the Louisiana Attorney General's Consumer Dispute line at 800-351-4889. You can also report any suspected fraud to the Better Business Bureau at (337) 478-6253 or visit BBB of Southwest Louisiana: Start With Trust.
Myths and Facts About Flood Insurance
Many property owners often have misconceptions about flood insurance, such as whether
they can get it, when they can buy it, and how much it costs.
Here are some of the most common myths and facts about flood insurance and the National Flood Insurance
Program (NFIP):
Myth: You can’t buy flood insurance if you live in a high-risk flood area.
Fact: You can buy federal flood insurance no matter where you live if your community participates in the NFIP.
Myth: Disaster assistance is the same as flood insurance.
Fact: Without flood insurance, most residents must pay out of pocket or take out loans to repair and replace
damaged items. Federal assistance is not always available and is not enough to get you back to your pre-disaster
condition.
Myth: Get the amount of flood coverage you can afford now.
Fact: Ask your insurance agent to quote you different levels of flood insurance coverage.
Myth: Renters can’t get flood insurance.
Fact: Renters can get contents coverage to be able to replace belongings.
Myth: Not every flood zone has some flood risk.
Fact: Flood insurance is needed and available in all flood zones.
Myth: You can’t buy flood insurance immediately before or during a flood.
Fact: You can purchase flood coverage at any time. However, don’t wait, because policies typically take 30 days to
go into effect. There are a few exceptions that reduce or eliminate the waiting period. Read about them at
https://www.floodsmart.gov/flood-insurance-cost/terms.
Myth: Homeowners insurance policies cover flooding.
Fact: Unfortunately, many do not find out until it is too late that their homeowners policy does not cover flooding.
Myth: Flood insurance is available only for homeowners.
Fact: Renters and business owners can get flood insurance too.
Myth: Only residents of high-risk flood zones need to insure their properties.
Fact: More than 40% of NFIP claims in the last five years come from outside the high-risk area. If you live in an
area of minimal flooding, you may qualify for a low-cost Preferred Risk Policy.
Myth: Federal flood insurance can be purchased only directly through the NFIP.
Fact: The National Flood Insurance Program (NFIP) partners with more than 60 private insurance companies to sell
and service flood insurance policies. If you don’t have an insurance company or if your insurance agent does not sell
flood insurance, use the NFIP insurance provider locator to find a provider near you.
Myth: Wind-driven rain is considered flooding.
Fact: While flood insurance policies specifically exclude wind and hail coverage, most homeowners’ policies include
this coverage. Rain entering through wind-damaged windows or doors or holes in walls or the roof resulting in
standing water or puddles is considered windstorm rather than flood damage. Federal flood insurance typically
covers water that comes up from the bottom and enters your home from outside.
Speak to a Community Education and Outreach (CEO) specialist by calling: 833-FEMA-4-US or 833-336-2487 or visit
CEO’s web page for publications you can use as guides for your recovery: https://fema.connectsolutions.com/lamit/
or https://fema.connectsolutions.com/la-es-mit/ for Spanish. These specialists provide information on how to repair
and rebuild safer and stronger after a disaster.
