Disaster can bring out the best in people — neighbors help neighbors, state and federal agencies spring into action, donations pour in and charities offer immediate aid.
But there is a more sinister element that sees the aftermath as an opportunity to extract a few fast dollars from disaster victims.
Authorities are now warning those reeling from the floods that ravaged northern and southern Indiana against these scammers.
The waters rise
Between Feb. 15 and 25, a deluge of storms slammed the region, with near-record rainfall amounts recorded.
In the northern part of the state, waterways including the Kankakee River spilled over their banks, leaving motorists and homeowners stranded.
To the south, the Ohio River swelled, damaging hospitals, homes, businesses and other structures.
In response, Gov. Eric Holcomb issued a series of five executive orders between Feb. 24 and March 16 declaring increasingly large swaths of the state’s counties to be disaster emergency areas.
In all, 35 of Indiana’s 92 counties are now under such a declaration, a step the state must take to request assistance from the federal government.
As of March 14, officials said flooding in northern Indiana and southwestern Michigan damaged more than 2,000 homes, the Associated Press reported. Estimates include close to 600 homes damaged in St. Joseph County and more than 1,200 damaged in Elkhart County.
Enter the scammers
As locals began to survey the damage, Indiana Attorney General Curtis Hill issued a warning to victims to be wary of those ready to take advantage: “Double check before you write a check.”
Hill implored victims to avoid agreeing to any repair or restoration work on the spot during initial contact with someone offering services, including signing contracts.
“Avoid signing any legally binding agreements without first gathering information and researching a business being represented,” Hill said Feb. 26. “Obtain information about the individual offering his or her services. Research the company the individual claims to represent. Look for signs of credibility such as an official website. Seek reviews and testimonials from former customers.”
Betsy DeNardi, director of the Consumer Protection Division for the Office of the Attorney General, said even though not enough time has passed yet to see complaints related to scams related to this weather event, this is a story the division sees all too often.
“What typically occurs is once there is some sort of large storm, tornado, wind gust, flooding, what will happen next is the individual scammers will start going door-to-door or sending mailers,” she said.
DeNardi said the con usually works like this: The grifters will approach a victim on spec and offer their services. In the case of flooding, it could be related to landscaping outside or water damage indoors. After quickly surveying the damage, they will then rush the mark to hand over a deposit for promised future work on the spot without signing anything.
And, that’s generally the last time the victims see any trace of them.
“So, you’re out money and you never get anyone to assist you,” said DeNardi.
After Holcomb’s executive orders began, Indiana Department of Insurance Commissioner Stephen W. Robertson issued a 60-day cancellation moratorium for any policyholder directly affected by the recent weather events.
This means that affected policyholders in impacted counties will be granted an additional two months to make their payments without their policies being canceled and without penalties.
The moratorium went into effect on March 2, and the department expects insurers to apply this moratorium retroactively to Feb. 14, the day before the severe storms began. The moratorium ends on May 1.
Jenifer Groth, director of communication and outreach for the Indiana Department of Insurance, said this sort of cessation was first implemented in June 2008 after the state was hit by severe storm damage and flooding.
DeNardi said that while this moratorium is welcome news for policyholders, they should still be wary of related insurance-based scams cooked up in the confusion.
“Individuals (say) that they’ll take care of communicating with your insurance company. … Then, they don’t follow through and you’re out your insurance claim,” she said. “Or, they take more than they are supposed to take from your insurance claim.”
Groth said if there is a complaint against an insurance company, it can be filed with the Department of Insurance.
“Insurance companies have fraud units to handle these types of issues,” she said.
Indiana University Maurer School of Law Professor Sarah Jane Hughes is university scholar and fellow in commercial law. She said in her in experience these sorts of rip-offs are sadly common in any community recovering from a natural disaster.
Hughes said the best protection was due diligence. She said checking potential contractors against services such as Homeadvisor and Angie’s List in addition to the local chamber of commerce would be the first step.
“If they don’t check out, you’re not going to sign anything and you’re certainly not giving them any money,” she said.
Hughes said common sense details such as a local phone number and a physical address are essential, but often overlooked. She said a simple check of the contractors’ vehicle for a company’s markings or an out-of-state license plate could save potential victims a world of hurt.
“If they’re from Texas where the weather has been decent lately, what are they doing in Elkhart fixing a flood?” she said.
Attorney Martha Staude is a member in Frost Brown Todd’s regulated business group whose practice is focused on insurance regulation. She said insurance companies can help separate legitimate offers from the fraudulent.
“Review all documentation before … you’re being asked to sign,” she said. “And, (you) shouldn’t be afraid to ask questions. … Even though you’re impacted by a disaster and your home (is) ravaged and you don’t really know which way to go, (don’t) immediately jump at something that sounds too good to be true.”•