One Dangerous Scam Every Home Owner Needs to Know About
Have you ever had a leaky roof? Damage to your home from a storm? Toilet overflow in your bathroom?
Not only are these types of situations all too common, but they also all require the work of vendors to come in and do repairs. Vendors include roofing companies, water remediation companies, flooring companies, and many more.
Southwest Florida residents who were affected by the recent tornado have also had to seek out vendors to repair their homes.
If you ever hire a vendor to do work in your home, there is one thing you NEED to know.
There are vendors who are scamming homeowners by asking them to sign a document called “Assignment of Benefits”.
What is so dangerous about this form?
The verbiage of this document gives the vendor control over the insurance claim rather than the homeowner.
It can even allow vendors to request additional benefits from the insurance company for work NOT performed by the vendor. These benefits include compensation for damaged personal belongings and additional living expenses.
Let’s take a look at a real life application of this situation:
Mr. Jones’ roof was damaged by the recent tornado, and water entered his house though his roof and damaged his living room set. A roofing company approaches Mr. Jones to see if he would like to use them to do the repairs to the roof. Mr. Jones agrees. Before starting the job, the roofing company asks Mr. Jones to sign some documents. Mr. Jones doesn’t read the documents, but signs them so that the work can get started as soon as possible.
If one of the forms Mr. Jones signed was an Assignment of Benefits, the roofing company can now file the claim with Mr. Jones insurance company. Not only can they directly receive payment for the work they do to the roof, but they can also request compensation for Mr. Jones’ living room set. Not only that, but the roofing company may be able to gain access to Mr. Jones personal information and documents they wouldn’t otherwise have access to.
As you can imagine, this is a situation no homeowner wants to find him or herself in. Not only that, but there is no valid reason to sign over this kind of authority to the vendor.
What kind of paperwork IS appropriate to sign at the time of hiring a vendor?
Upstanding vendors would not ask you to sign an Assignment of Benefits. Rather they will probably present a form that says “Direction of Pay”, ensuring that they will be paid for work completed, either by you or your insurance company.
Keep in mind too that your insurance company usually has a list of preferred, approved vendors. Using vendors from your carrier’s approved list typically makes your claim process smooth and helps you avoid situations of claim abuse.