WILMINGTON, N.C. (WECT) - Americans lose $40 billion a year to insurance fraud, according to the FBI. Even if you don’t have any run-ins with your insurance company, rates go up $400 to $700 a year due to insurance fraud.
As homeowners across Brunswick County’s beach towns recover from hurricane Isaias, many are in danger of falling victim to fraud.
Kenneth Pedigo with the National Insurance Crime Bureau says the agency is working hard to protect people from unsavory contractors, but believes its important to make sure people in the community know what to look for before they’re taken advantage of in the first place.
Experts warn that businesses coming to your door and approaching you about working on your house is something to be weary of.
The National Insurance Crime Bureau says to secure three estimates, get everything in writing and to never pay in full upfront.
Out of state contractors are another red flag, as well as contractors that offer to work everything out with your insurance company for you. If you’re wondering where to begin, he says many insurance companies actually have lists of credible contractors on standby for their customers.
“It’s a bad time for you, we understand that… but you need to slow down or get help from family members to help you take the right path and don’t rush into anything. As badly as you want it repaired right away, you start trying to get things done quickly or someone knocks on your door and you say go to work heres the money- that’s where you make the mistake and that’s where we see people become a victim of fraud,” said Pedigo.
In addition to contractor scams, authorities are sending out warnings about the flooded out cars left in hurricane Isaias’ wake.
Pedigo says cars damaged by the storm surge could be back on the market in a matter of weeks. People across the east coast should have their guard up if they plan on buying a car anytime soon.
Bad cars make it back on the market by a process called title washing. Cars marked down as a total loss from the storm are marked as salvage on their title once the insurance company pays out the claim. Fraudsters can then buy those cars, and take them over state lines to swap the old state’s title for one that doesn’t mention it was ever damaged. From there, it has a clean title and it can be put up for sale without the buyer ever knowing what happened.
If you’re looking for flaws, you can often see subtle signs like moisture in the tail lights, rusted screws in the console or grime in forgotten places like the seat belt retractors, but the safest way to tell is to take the car to a certified mechanic.
The National insurance crime bureau also has a tool online where you can key in the car’s VIN number and see if it was ever marked as being a salvage.
“A lot of the vehicles that get hauled out of here we do record their VINs at code parts insurance auto auctions well report those VINs as well as stolen vehicles that are insured. If you’re purchasing the car, check the VIN check take a look at it, run the vehicle identification number to make sure its not in that database,” added Pedigo.
Taking some of the preventative measures below will also help make sure you aren’t taken advantage of:
- Buy from a reputable car dealer.
- Inspect the vehicle thoroughly – look for water stains, mildew, and sand or silt under the carpets, floor mats, headliner cloth and behind the dashboard.
- Check for recently shampooed carpet.
- Inspect the interior upholstery and door panels for fading.
- Check for rust on screws in the console or areas where water normally wouldn’t reach.
- Check for mud or grit in the spare tire compartment, alternator crevices, behind wiring harnesses, around the small recesses of starter motors, power steering pumps and relays.
- Check inside the seat belt retractors by pulling the seat belt all the way out and inspect for moisture, mildew or grime.
- Check door speakers, which are frequently damaged by flooding.
- Look under the hood for signs of oxidation. Pull back the rubber “boots” around electrical and mechanical connections for these indicators. Ferrous (containing iron) materials will show signs of rust; copper will show a green patina; aluminum and alloys will have a white powder and pitting.
- Ask about the vehicle’s history, and whether it has been in any accidents or floods.
- Inspect the title and ownership papers for any potential or questionable salvage fraud.
- Conduct a title search of the vehicle.