Posted: 6/1/2011
Illinois Insurance Consumers to Gain Protections From ‘Storm Scammers’ Thanks To New Legislation
Illinois insurance consumers will soon benefit from increased protection against unscrupulous individuals posing as contractors who show up in the wake of tornados and strong storms, thanks to legislation passed by both chambers of the state legislature and now awaiting the governor’s signature to become law.
“Thanks to the efforts of Representative Ann Williams, these so-called ‘storm scammers’ face the same future as the snake oil salesmen of yesteryear,” said Mark Johnston, Illinois state affairs manager for the National Associational of Mutual Insurance Companies (NAMIC). “Because of this legislation, consumers in Illinois will more readily be able to know if the person knocking on their door after a major storm is legitimate or a fraud.”
HB 3034 was introduced by Williams, D-11th District, earlier this year to add several new consumer protections to Illinois’ Home Repair & Remodeling Act. The measure only applies when a claim is being made on an insurance policy. Johnston said the new law also will:
- Prohibit a contractor from waiving the insurance deductible as an inducement to enter into a contract for home repair;
- Allow a policyholder who enters into a written contract with a residential contractor to be paid from the proceeds of an insurance policy to cancel the contract prior to the fifth business day after the person has been notified that the claim or contract is not covered under the insurance policy;
- Require that certain notices regarding cancellation be included by contractors; and
- Provide that if a contract is cancelled, residential contractors shall receive compensation for any emergency services they provided prior to cancellation of the contract.
Johnston noted that storm scammers often present themselves as legitimate contractors offering home repair or remodeling services, but they do shoddy work or no work at all. He said storm scammers often flock to an area after a catastrophic wind or hail storm.
Storm scammers often employ solicitors who receive a fee for getting a consumer to sign a contract for home repair, according to Johnston. Such fees are often based on the size of the contract. Solicitors often walk door-to-door in storm-affected neighborhoods using high-pressure sales to encourage or scare consumers into signing contracts for home repair. They often prey on the elderly; especially those who have their houses paid off because when a homeowner has a mortgage, the insurer must include the name of the lienholder on the check.
“With the passage of this legislation, Illinois joins the growing ranks of states that have declared that con artists posing as contractors will no longer be allowed to fleece homeowners in the wake of damaging storms without facing serious consequences,” Johnston said.
Contact: Lisa Floreancig