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As many Pennsylvania citizens continue to recover from the damage ensued from super-storm Sandy, they may be unaware of another post-storm threat that can have a surprising impact on their wallets—homeowners insurance fraud. At the end of the third quarter of 2012, Pennsylvania saw a 25 percent increase in the number of reported crimes involving homowners insurance in the Commonwealth—meaning that a false, misleading, or inflated claim was knowingly submitted to an insurance company—resulting in increased insurance rates for ALL insurance-paying consumers. Given this 25 percent increase, one has to ask, will super-storm Sandy make our numbers climb higher through the first half of 2013?

Our organization, the Insurance Fraud Prevention Authority (IFPA), advises the Governor and General Assembly on the nature and scope of the problem of insurance fraud in the Commonwealth, so we pay particular attention to how a storm of this caliber could impact insurance-paying consumers in our state. The teachings of the past tell us that fraud related to homeowners insurance tends to increase in places affected by damaging storms. Much of this fraud often involves contractor scams where faulty contractors infiltrate an area post-storm and target unsuspecting homeowners by taking advantage of their insurance policies. Popular scams include creating or exaggerating the damage on a home, disappearing without finishing the job up to code, or even leaving homeowners stuck with numerous vendor bills the contractor did not pay.

A question I’m asked is, “How can homeowners protect themselves from these scams after a storm?” First, the IFPA recommends that before signing with a contractor, consumers should check to see if the contractor is registered with the PA Attorney General’s Office. You can check to see if your contractor is registered by visiting the PA Attorney General’s website at www.attorneygeneral.gov . In addition, the Attorney General’s Office recommends contacting the contractor’s references, receiving more than one bid for the job, and checking for complaints filed with the Better Business Bureau. Considering that Pennsylvania saw a 25 percent increase in reported homeowners insurance fraud before Sandy ever took place, these are tips that every homeowner should remember even long after Sandy’s damage has been mended.

By better understanding your insurance policies and being aware of contractor scams, you can better avoid becoming a victim.

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