Today Hurricane Harvey is already a week old, although the devastation is just beginning to be tallied. It has the very real possibility of being the most expensive natural disaster in American history. Today Hurricane Irma, the most powerful Atlantic storm in 100 years, touched Category 5 and the newscasters are falling over each other to out-hype the next forecaster as it approached the U.S. mainland. The United States may endure the uncommon scenario of two catastrophic natural disasters within two weeks of each other.
Harvey: A tropical cyclone attacks with two weapons, wind and water. Coming ashore as a Category 4 storm, Harvey’s wind packed a terrifying punch; the storm will be remembered as a water event, though. After the winds slowed, Harvey took up residence over southern Texas and Louisiana and rained and rained, for days. By the time it pried itself out of the region, Harvey had dumped 52 inches, the highest recorded rainfall from a tropical cyclone in the United States. If you are interested in a deeper look at the statistics, look here or here, it’s absolutely stunning. In many ways, the damage is like that sustained from Hurricane Katrina. Although Katrina’s flooding was due to decades of government malaise and inattention to infrastructure, the result was the same - feet of water soaking personal, commercial and public property for days. Flooding means expensive damage, lots of it. (If you’re looking for facts and not the hype, we recommend visiting The National Hurricane Center.)
The Disaster After the Disaster: Hurricane Sandy climbed the East Coast of the United States in 2012. At my home in the western suburbs of Philadelphia it was just a bad storm. 70 miles to the East, the citizens of New Jersey and New York were fighting for their lives. It was the disaster that we had been warned about for decades. Many people lost everything except the clothes they were wearing – this all happening on the edge of winter. In any case, relief, whether it comes from insurance, government or non-profits, must come quickly to prevent a permanent decline in the region. Hurricane Sandy is unique in that it was also the most closely documented disaster in terms of fraud. The fraud actually led to Sandy earning a more infamous moniker “The Disaster After the Disaster” or “The Storm After the Storm.”
Enter the Vultures: When you talk about the bad actors that prey upon the remains of a disaster you need to consider three types of fraud: program, charity and consumer.
Program Fraud: This can be the hardest to understand for many. To keep it basic, remember the word “program.” Program fraudsters seek to skim money that is pushed out through government agencies and other non-government organizations. A common method of operation involves kickbacks to the distributors of funds from contractors that are awarded funds.
Charity Fraud: Fraudulent charities appear after every notable disaster. The common methods in charity fraud include email and social media campaigns, and even direct collection, home to home. To learn more about charity scams visit the FTC, here. If you want to investigate a charity that you are considering, there are multiple organizations that monitor and rate them. Here are two: https://www.charitynavigator.org and http://www.guidestar.org.
Consumer Fraud: This one is easier to comprehend. You, as an individual or a business that has had your property damaged by a disaster, are a consumer. After a disaster, you are desperate for relief, which makes you easy prey. Following the storm, contractors, independent insurance adjusters and volunteers race to the scene from all over the country. Most of these people have good intentions and are very much needed, even if they’re coming to make a profit, but the fraudsters come also. These criminals move in quickly, grab what they can, and get out quickly when they begin to attract attention. Learn to protect your business or yourself though these sources: National Insurance Crime Bureau and your State Consumer Protection Agencies. You may also want to look at the Better Business Bureau’s “Scam Tracker.” Which has a visual representation of reported scams by region. Finally, take a close look at the Coalition Against Insurance Fraud.
We know you are desperate to get work done, but you need to protect yourself first. The act of performing due-diligence is not just for business; and services like Yelp, Home Advisor and Angie’s List are not the answer. Why? Because both are easy to fool with fraudulent or unqualified reviews.
What about the legit contractors, adjusters and insurers?
You are victims of fraud also. The first thing you need to do may seem a bit ridiculous.
· Contractors, you need to demand that all your clients ask to see your credentials – which include licenses, certifications, background checks and qualified reviews.
· Adjusters, you need to demand the same from the contractors you work with; and you need to demand that the insurers that you service demand the same from you.
Next, you need to make this information easily available at all times.
Trust Exchange has deployed a business information system that is unmatched in its ability to share accurate and qualified information to every client that requires it in real time. You have no idea of how much money the Trust Exchange platform can save you until you ask.
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