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Archive for Thursday, April 11, 1991

DAMAGE FROM HAILSTORM INVITES REPAIR SCAMS

April 11, 1991

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The hailstorm that hit Lawrence two weeks ago triggered an economic boom for home-improvement contractors and body shops, but also produced a climate ripe for less-than-scrupulous practices, say a state official, consumer advocates and others.

Kansas Insurance Commissioner Ron Todd said that as of this morning more than $21.8 million had been paid out in the Lawrence area by insurance companies for claims related to the March 26 hailstorm.

In reporting the claims total, Todd, a Lawrence resident, sounded a precautionary note for those faced with home or car repairs.

"We urge insureds to use extreme caution when they select someone for repairs, especially on their homes," Todd said.

One of the problems is that such damaging storms often attract out-of-town contractors hoping to cash in on the readily available and lucrative business, he said.

SEVERAL anonymous callers have telephoned the Journal-World with reports of out-of-town contractors buying or renting a local roofing company's name, along with its Yellow Pages listing, in an effort to be identified as a stable, local business.

William Lemesany, a local attorney and apartment owner who also spent 15 years in the roofing business in Lawrence, said he knows of one instance in which a local company was paid $10,000 following the hailstorm to enter into a sort of "partnership" arrangement with an out-of-town company. Lemesany did not identify the firm.

"I suppose these things go on all over the country after hailstorms," Lemesany said. "They've swarmed in here like locusts."

Gary Toebben, president of the Lawrence Chamber of Commerce, said the chamber keeps files on local firms that are chamber members. Those firms, he said, are the ones the chamber recommends to callers.

Toebben added, however, that just because a contractor is from out of town doesn't mean the firm is unscrupulous.

"SOME ARE just good business people who see the opportunity for business," Toebben said, but added, "Some are opportunists who take advantage of the fact that you want action quickly."

Those advantage-taking opportunists, Toebben said, will grab all the work they can in as short a period as they can. Then, once they've finished their business here, they and the guarantees on their work leave town for an unknown destination.

"That's why we recommend that people do business with reputable companies and with someone who will be around in a couple of months to take care of any problems or defects that might occur. . . . We also recommend that before doing business with anyone, people ask for references and then go out and actually check those references," Toebben said.

LEMESANY said one tactic consumers should beware of is pressure by contractors to replace a roof immediately.

"They'll frighten you. They'll say, `We can get a roof on here right away.' They're cashing in on ill-founded fears that the roof will leak and cause additional damage," he said.

Lemesany said most of the roofs he's seen don't require immediate attention, and by waiting homeowners will be able to save money.

"I can bet you that by September the price of a roof is going to be cheaper than it is now, because by then just the local roofers will still be here and they'll be fighting for business," he said. "And I'd bet that only five in 100 houses damaged in the storm will need to have roofs replaced by then."

Renata Marinaro, a counselor with Lawrence Consumer Affairs, said her office is keeping a close eye on all of the roofing firms.

MARINARO also warned homeowners to beware of any home-improvement firms that demand a cash payment before work begins.

"We've gotten calls from people saying they've been asked to put up $1,000 before they'll begin a job," Marinaro said. If such payment is made, she said, the homeowner may never see the contractor again.

She said people with questions about any hail repair firms should contact the Consumer Affairs office, 843-4608.

Jim Pilch, a local insurance agent, said he's concerned that homeowners contract with firms that carry their own liability and worker's compensation insurance.

"The property owner is responsible for all damage they do and any injuries that they might incur," Pilch said. Property owners should ask contractors to prove they have general liability and worker's compensation insurance, he said.

"You might have a two-story house and somebody falls off and you're liable for their injuries. That could be a substantial loss," Pilch said.

"I hate to see people taken advantage of. We have the potential here for a lot of scams."

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