Insurance Fraud Swells During Storm Season

This past summer, when Connecticut Department of Consumer Protection investigators were operating an undercover sting house designed to catch unregistered home improvement contractors, they were "amazed" at the offer they received from one contractor. Their work and cooperation with local police and agents from the National Insurance Crime Bureau led to the arrest of the contractor for insurance fraud, and the case is now being tried in court.

The investigators were posing as homeowners seeking bids on a variety of home improvement jobs, including roof repairs. According to the investigators’ report, a contractor visited the house in June, and before even inspecting the roof, asked if any roof damage had been caused by wind or storm, and indicated that if he, the contractor, “can time the damage to a storm, [the homeowner’s insurance company] will pay.”

In other words, he told undercover agents (who were posing as homeowners) that they could get a free roof, paid for by their insurance company.

The contractor offered to bury the insurance deductible into the cost of the job and to contact the insurance company right away to begin the claims process. When inspecting the roof, he noted where damage existed and indicated that he would have to show damage to both sides of the roof in order to get the entire job paid for.

Once the insurance company paid the claim, the 'homeowners' were to sign the check over to the contractor.

“Consumers should avoid doing business with anyone whose business practices are questionable or seem fraudulent. When arrested, this contractor claimed he didn’t believe he had done anything wrong, and placed that the blame on the consumers. You don’t want to place your home and your trust in the hands of someone who is ready and willing to involve you in committing a crime,” Consumer Protection Commissioner Jerry Farrell said.

Nationwide, the total cost of non-health insurance fraud is estimated to be more than $40 billion each year, Farrell said. “That means insurance fraud costs the average family between $400 and $700 a year in the form of increased premiums," the commissioner said.