Triple-I: Homeowners Can Combat Post-Disaster Fraud Schemes

For Immediate Release
New York Press Office: Michael Barry, 917-923-8245, michaelb@iii.org

NEW YORK, May 19, 2023 —To highlight how homeowners can protect themselves from dishonest contractors, the Insurance Information Institute (Triple-I) and the National Insurance Crime Bureau (NICB) are marking Contractor Fraud Awareness Week (May 22-26, 2023).

“Home contractor fraud needs fixing as entirely too many consumers fall victim to shoddy work that puts what’s oftentimes their greatest investment at increased risk. The Insurance Information Institute is proud to join forces with the National Insurance Crime Bureau to educate homeowners about the common signs of fraud and to offer steps homeowners can take to make sure they are hiring a reputable contractor,” stated Sean Kevelighan, CEO, Triple-I.

Post-disaster fraud schemes often begin with an unsolicited visit from a dishonest contractor who seeks to help victims rebuild. In addition to showing up at a victim’s front door to generate business, dishonest contractors frequently use flyers to advertise their services. Yet homeowners have multiple ways to determine a contractor’s credentials and reputation.

“Catastrophic events negatively impact millions of Americans every year,” said David Glawe, President, and CEO, NICB.  “From hurricanes to floods and everything in between, these events are often scary and life-changing. But what makes this impact worse, is what happens afterwards as insurance fraud targets areas affected by these natural disasters. Often before the flood waters recede or rescue operations are complete, dishonest contractors prey upon individuals who are at their most vulnerable. Before hiring anyone, call your insurance company first. If you didn’t request it, then you should reject it.”

Homeowners in the market for a reputable contractor should:

1. Get at least three written estimates for the work and compare bids—In the aftermath of a major natural disaster, contractors are in high demand.  The pandemic and supply chain disruptions also have put additional pressure on labor and building material costs. 

2. Check credentials, including licenses, references, and insurance—Reputable contractors will provide homeowners with their state and local business licenses, physical business address and telephone numbers, as well as references.

3. Make sure your contract includes estimated construction schedules and prices for labor and materials—If a contractor requires full payment upfront for a job, homeowners should think twice about doing business with them. It is common, however, for a contractor to request some money upfront after signing a contract with a homeowner as the contractor needs to buy supplies. 

4. Contact your insurer to make sure your policy is up to date— If a contractor offers advice on what a homeowners insurance policy covers, the policyholder should have this interpretation double-checked by an insurance professional affiliated with the insurer who covers the damaged home.