New provisions protect homeowners from storm chasers
MADISON—A new state law aims to protect homeowners against unscrupulous contractors who offer to repair storm damage.
The new law is an effort to better protect consumers against so-called storm chasers, contractors who descend on communities to convince homeowners their homes have been damaged but can be fixed with a quick call to insurance adjusters.
The law's provisions seem to protect insurance companies as much as homeowners, according to a Wisconsin State Journal report.
But Sandy Chalmers, an administrator with the state's consumer-protection agency, said preventing insurance fraud helps consumers, as well.
There already are laws that protect consumers, she said, but fraudsters were using loopholes to take advantage of insurers, she said.
Even without a recent catastrophic storm that resulted in damage, the companies often find damage that happened in storms months or years ago.
“Every year, we hear from consumers who have been ripped off by storm chasers,” Chalmers said. “Take your time to research the contractor you hire.”
Chalmers said storm chasers charge high prices for shoddy work or offer a low price to get an upfront payment and then run off with a victim's money.
The workers are often from out of state and move quickly from town to town, making them difficult to track. The workers pressure homeowners for a down payment, and sometimes increase the price of the job when they ask for the final payment.
“Never let these workers into your home and don't give into their high-pressure tactics,” Chalmers said.
Under the new law, contractors can't promise to pay a homeowner's property-insurance deductible, nor can they negotiate with insurers on the customer's behalf.
The contractor can, with the consent of the customer, discuss with the insurer damages, repairs and costs associated with the work.
Other new provisions include:
-- Before entering into a contract with a customer, the contractor must give the customer a questionnaire to determine whether the work requested is related to an insurance claim.
-- Customers have a right to cancel contracts within three business days of being notified that their insurers have denied all or any part of the claims for work. Contractors must notify customers of this right.
Sandra Spann, a spokesperson for American Family Insurance, said the new law excites her company because it better protects consumers and the industry.
“With these fly-by-night contractors, their No. 1 goal is to scam our customers,” Spann said. “What they are doing is putting legitimate contractors and insurance companies in a precarious position.”
Spann said neighboring states already have adopted similar protections.
Wisconsin, she said, is no longer an island.
“We worked closely with the builders' association to get these new protections in place,” she said. “First and foremost, the goal is to make the customer whole again.”
The state urges homeowners to be cautious about hiring contractors.
Consumers should ask contractors for references and seek referrals from friends and neighbors, Chalmers said. They should consider hiring local companies and ask to see contractors' state-issued registration cards.
“What you need to do when someone knocks on your door saying you have hail damage and they can fix it is to call your dedicated insurance agent and report it as a claim,” Spann said. “If it sounds too good, it usually is.”
In most cases, American Family will send out an adjuster to assess the damage.
“The adjusters are trained to spot damage and often might find damage you didn't know existed,” she said.
Spann said it's difficult to say whether a claim for storm damage would result in a premium increase for a homeowner.
“There are many, many factors that go into that, and we look at a 20-year storm history,” she said.