Contractor Fraud Continues to Rise Across the United States

With an increase of severe weather threats, comes an increase in contractor fraud. The National Insurance Crime Bureau (NICB) is warning homeowners and business owners about the increased threat that contractor fraud is becoming nationwide, immediately following severe weather and natural disasters, to include wildfires, tornadoes, floods, hurricanes, etc.

Catastrophic weather events leave homeowners and business owners scrambling to rebuild, but also open the door for fraudulent claims, and fraudulent contractors looking to capitalize on homeowners’ and business owners’ grief, vulnerability, and urgency to get their homes, businesses, and lives back together.

NICB writes, “According to disaster-cost data from climate communications nonprofit Climate Central, the United States experienced 23 major billion-dollar disasters in 2025, resulting in approximately $115 billion in damages. At the same time, reported instances of contractor fraud increased 38% from 2023 to 2025. The cost of this fraud is felt by the insurance industry, policyholders and communities alike.”

The NICB also indicated that the schemes are becoming more sophisticated, and most commonly include “manufactured roof damage, inflated water mitigation claims, abuse of assignment of benefits agreements, exploitation of elderly homeowners, and falsified documentation.”

Here are some tips that the NICB hopes will reach consumers, and will be beneficial to pass along to your customers as well!

Working With Insurance

• Call your insurance company first if you think you might have damage from a storm or other disaster.

• Make sure you review and understand all documents sent to your insurance carrier. Signing an Assignment of Benefits agreement transfers your insurance rights to the contractor. Know what that means for you.

• Never let a contractor interpret the language of your insurance policy or discourage you from contacting your insurance company.

• Be on the lookout for people calling and saying they are with a national carrier. Do not provide ANY personal information over the phone without them first confirming a claim number. If something sounds fishy, report it to your insurance company immediately.

• Note that insurance carriers will never ask you to pay your deductible up front or over the phone.

Hiring a Contractor

• Get more than one estimate.

• Request references and do the research.

• Ask to see the salesperson’s driver’s license and write down the license number and their vehicle’s license plate number.

• Look out for out-of-state contractor licenses and vehicle registrations, as these may indicate possible fraudulent contractors.

• Never let a contractor pressure you into making a quick decision or hiring them.

• Remember, if you didn’t request it, reject it! 

Getting the Work Done

• Get everything in writing. Cost, work to be done, time schedules, guarantees, payment schedules, and other expectations should be detailed and itemized.

• Never sign a contract with blanks; terms you don’t agree with can be added later.

• Never pay a contractor in full or sign a completion certificate until the work is finished.

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