National Insurance Crime Bureau

Disaster Fraud

Natural Disasters: Fertile Ground for Fraudsters

Hurricane House Damage

Unfortunately, many insurance fraudsters prey on disaster victims at a time when they are emotionally devastated and most susceptible to scam artists who present themselves as concerned contractors. In a situation like this, you’re already under tremendous emotional stress, so the last thing you need is someone trying to take advantage of you.

Hurricanes, earthquakes, floods, tornadoes, hailstorms – becoming a victim of a natural disaster may be impossible to avoid. You can, however, avoid being victimized by dishonest contractors who emerge in droves in their wake.

Don’t be Victimized Twice

It’s bad enough dealing with the aftermath of a natural disaster without worrying about your contractor. Salespeople often go door-to-door in damaged neighborhoods offering cleanup and/or repair services. While many of these individuals are honest and reputable, others are not. The dishonest ones may pocket your payment or insurance settlement without completing the job. Or, they may use inferior materials and perform shoddy work not up to code.

Also, beware of unscrupulous contractors who offer to manipulate the price to cover your deductible or extra work not caused by the catastrophe. This is insurance fraud, and insurance fraud is a felony. Insurance coverage may be rendered void if there is misrepresentation by an insured.

Tips to Avoid Contractor Fraud

The NICB recommends reviewing these tips before you act on a contractor's offer for services:

Contractor Warning
  • Work with your insurance company to get an accurate damage estimate and references for a reliable contractor.
  • Work only with licensed and insured contractors.
  • Get an estimate from more than one contractor.
  • Don’t be pushed or pressured into signing a contract right away.
  • Get everything in writing, including cost, work to be done, time schedule, guarantees and payment schedule.
  • Require references and check them out.
  • Ask to see the salesperson’s driver’s license and write down the number; also write down the salesperson’s license plate number.
  • Never sign a contract with any blanks not filled in.
  • Never pay a contractor in full or sign a completion certificate until the work is completed.

Download Natural Disaster Resources

You can find more information in NICB’s "Disaster Fraud" brochure (English or Spanish) and "Hail Damage Fraud" brochure (English or Spanish).

These are in PDF format. If you don't have it already installed, download Adobe Reader.

Report Fraud

If you suspect fraud activities, contact NICB in one of three easy ways:

  1. Call 800.TEL.NICB (800.835.6422)
  2. Submit a form online.