ST. PETERSBURG, Florida— Ready to pay double for your homeowner’s insurance?
Experts say it could happen over the next five years thanks in part to a small group of “disaster restoration companies” targeting homeowners and their insurance companies.
Homeowners who need help cleaning up water damage after a broken pipe, suffer a fire, or who have a tree come down during a hurricane hire a restoration company and are asked by the company to sign an “assignment of benefits form” before the work can begin.
The restoration company shows up and tells you not to worry about the cost saying “we’ll deal directly with your insurance company” and then has you sign the “Assignment of Benefits” form.
Experts say by signing that form you’re giving up your entire insurance payout to the restoration company who will often overcharge or inflate their charges according to homeowners insurance expert Amy Boggs.
“It is a huge issue,” said Boggs. “Right before Irma, I wanted to say to homeowners the first people who are going to be knocking on your door are going to be the illegitimate restoration contractors who are doing nothing but trying to take your entire benefits package from you in exchange for doing some slipshod work.”
Boggs says the company will often begin permanent repairs without notifying the insurance company.
“Then they're charging double or triple what would typically be charged in the industry for that same work,” said Boggs.
So who would sign away all their insurance money? Boggs says it happens all the time. The idea of not having to deal with an insurance company sounds appealing to some while others simply don’t read what they’re signing.
“They're preying on folks who are in probably one of the most desperate situations they've ever been in,” said Boggs. “Their banking on the fact that you're not going to read or understand exactly what you're doing. And that's the point here, if I can give one teaching. Please read, read, read it if it sounds too good to be true, it probably is.”
And what if you unknowingly sign the form? Boggs says there is a way out if you act quickly.
“There's a right of rescission, which means, ‘oh wait, I made a mistake.’ That's a three day right typically in this situation,” said Boggs.
But Boggs warns these companies often try to start their work right away and once the work is completed, you’re too late.
Whether you have a claim or not this type activity is impacting anyone with homeowner’s insurance.
Experts expect a huge influx of these type claims following Hurricane Irma and say without changes, insurance coverage for a $300,000 house could double to near $8,000 a year by 2022.