Louisianans Warned of Contractor Fraud Following Dual Hurricanes

October 16, 2020

Louisiana Insurance Commissioner Jim Donelon and State Representative Jonathan Goudeau are warning residents affected by Hurricanes Laura and Delta that both the Louisiana Department of Insurance and Rep. Goudeau’s office have received complaints of contractors working in hard-hit areas requesting full payment of insurance settlements before any work is completed.

Insurance checks are usually written to the policyholder or the policyholder and the mortgage holder jointly. Those receiving insurance checks should retain control of the funds and pay any contractors as they reach contractually indicated milestones.

“It’s the sad truth that large natural disasters with a lot of property damage attract dishonest dealers from in and out of state,” said Commissioner Donelon.

“Unfortunately, once a scam artist has made away with your initial payment or full settlement, recovery can be very difficult. I advise all consumers to be vigilant when hiring construction assistance in the aftermath of this devastating hurricane season,” Donelon said in an email release.

Commissioner Donelon and Rep. Goudeau recommended property owners impacted by the hurricane take the following steps to avoid contractor fraud:

Before any work is started, request a clearly worded, itemized contract with the name of the builder included. Review it with the contractor and make sure you understand and agree with its contents before the contract is signed. The contract should include the following:

  • A separate breakout of labor and cost of materials.
  • An agreed upon schedule for the homeowner to make payments as construction milestones are achieved.
  • The contractor’s responsibility to get all required permits.
  • The date the project is to begin and the date it is to be completed.
  • Proof of insurance coverage from the start date to the finish date.
  • A statement guaranteeing that the work area will be left in its original condition when the job is done.
  • If possible, go one step further and ask that the contractor’s insurance carrier mail a certificate of insurance coverage directly to you.
  • Finally, homeowners should only pay as work is completed and should never work with contractors who are not licensed by the state of Louisiana.

Contractor licenses may be checked by visiting www.lacontractor.org or calling the Louisiana State Licensing Board for Contractors at 1-800-256-1392.

Source: Louisiana Department of Insurance

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