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National Insurance Crime Bureau

Severe Weather Leaves Homeowners Sifting Through Debris

NICB Urges Caution as Consumers Seek Contractors to Conduct Repairs

Contractor Fraud Tips

DES PLAINES, Ill., April 1, 2021 — After tornadoes, hail storms, heavy rains, and high winds have moved through several states, the National Insurance Crime Bureau (NICB) reminds consumers that in the weeks ahead, homeowners should be alert to potential fraud by deceitful contractors and home repair or debris cleanup businesses.

Following a disaster, victims are understandably confused and shaken by the damage or possible loss of their homes and belongings. Sadly, it is at this time crooked contractors arrive and press homeowners into paying out their insurance claim prior to the repairs being completed. Time and again, investigators with the NICB have seen these bad actors collect payment and then disappear without completing the work that was promised.

Typically, these disaster repair scams are unsolicited, beginning with a visit from a contractor who seeks to help victims rebuild. Before hiring any contractor, call your insurance company. There is no need to rush into an agreement with a contractor who solicits your repair work, especially if it was not requested.

NICB suggests you consider these tips before hiring a contractor:

  • Get more than one estimate.
  • Get everything in writing. Cost, work to be done, time schedules, guarantees, payment schedules, and other expectations should be detailed.
  • 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 for out-of-state contractor licenses, as well as out-of-state vehicle registrations, as these may also indicate possible fraudulent contractors. 
  • Never sign a contract with blanks; unacceptable terms could be added later.
  • Never pay a contractor in full or sign a completion certificate until the work is finished.
  • Ensure reconstruction is up to current code.
  • Make sure you review and understand all documents sent to your insurance carrier.
  • Never let a contractor pressure you into hiring them.
  • Never let a contractor interpret the language of your insurance policy.
  • Never let a contractor discourage you from contacting your insurance company.

Furthermore, some deceitful contractors will state they are supported by the government. However, the Federal Emergency Management Agency does not endorse individual contractors or loan agencies. Consumers should call FEMA for more specifics at (800) 621-FEMA.

The NICB has produced public service announcements on this contractor fraud for both radio and television and in English and Spanish.

If you believe you have been a victim of fraud, call the NICB at 1-800-TEL-NICB. For additional information on hiring contractors, follow this link.

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800.TEL.NICB (800.835.6422) or submitting a form on our website.

About the National Insurance Crime Bureau: Headquartered in Des Plaines, Ill., the NICB is the nation's leading not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through data analytics, investigations, learning and development, government affairs and public affairs. The NICB is supported by more than 1,400 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $525 billion in insurance premiums in 2019, or more than 82% of the nation's property-casualty insurance. That includes more than 95% ($241 billion) of the nation's personal auto insurance. To learn more visit www.nicb.org.