Threat of Fraud—Texas

Amount: Unknown

Despite reports that around 85% of the homes affected by Hurricane Harvey did not have flood insurance, in the aftermath of Harvey insurance fraud will likely be rampant. Although most public adjusters, contractors, and builders are honest, straightforward and professional, the amount of money that must trade hands after a natural disaster is such a huge amount that it tempts fraudsters from every skill set and level.

As an insurer or FEMA employee, be aware of fraud by insureds by looking for several things. A homeowner may misclassify flood damage as something that is actually covered under a general homeowners policy. A homeowner that lives hundreds of miles outside of the disaster area may file a claim for damage that was “caused” by the disaster. Bids from contractors can be rigged in order for them to receive a higher payout for a job, resulting in a higher payout from the insurer.

As a homeowner, the risk of fraud is just as high, if not higher. Here are a few ways to avoid being duped by fraud as a homeowner. Fraudsters who target vulnerable storm victims are often called “Storm Chasers”. Once the Harvey induced flood waters begin to recede, residents should beware of scammers calling and saying their insurance premium is due and demanding immediate payment. Be wary of anyone demanding immediate payment for anything, including large and small home repairs, used cars, and replacement home items. Also keep in mind that government agents and FEMA employees will never arrive on your doorstep to offer financial aid. If someone shows up at your door and is offering aid in exchange for a small application fee, it's a scam. For people wishing to donate to Harvey victims, make sure your donations are going to a reputable group. After the storm began, countless fraudulent websites popped up claiming that they provide Harvey aid, and seeking donations from unknowing people just wishing to help. There are several organizations already set up in Texas that are currently in the process of providing the specific sort of aid that the victims of Harvey need.

If fraud of any type is suspected in the aftermath of Hurricane Harvey, the attorney general's office announced last week that it had set up a hotline, the FEMA Disaster Fraud Hotline, to report suspected fraud. The hotline has already received hundreds of complaints, and can be contacted toll free at 1-866-720-5721.