Contractor fraud after storms: how it works and how to stop it

Contractor fraud after a storm usually takes one of four forms: a deposit taken and no work done, shoddy work billed as a full repair, a claim inflated with the homeowner's help, or a signature that hands the contractor control of the insurance claim. The common thread is a stranger who arrives within days of the storm, knows exactly how to talk to your insurer, and wants a signature before you have had time to call anyone.

The National Insurance Crime Bureau (NICB), the industry's anti-fraud organization, reported in May 2026 that reported instances of contractor fraud rose 38% from 2023 to 2025, according to a Carrier Management report on its sixth annual Contractor Fraud Awareness Week. That figure is NICB's count of reports it received, so it measures reporting as well as the underlying fraud, but the pattern it describes matches what regulators warn about after every major storm.

The four patterns

1. The deposit that vanishes

A crew canvasses a damaged neighborhood, quotes a roof or a tarp-and-repair package, and asks for a large payment up front to "lock in materials." The work starts late, stops early or never starts. NICB's warnings consistently flag large advance payments and pressure to sign quickly. The money is gone because the contractor has no local office, a name that changes by season, and a phone that stops being answered.

2. The deductible "deal"

"We'll take care of your deductible" sounds like a favor. It is a way of inflating the invoice: the contractor bills the insurer for the repair plus the deductible you were never asked to pay. In Florida, Fla. Stat. 817.234 makes it a third-degree felony for a contractor, with intent to defraud, to pay, waive or rebate all or part of an insurance deductible on covered property repairs. Other states have similar rules, and many treat the homeowner who goes along as a participant. Your deductible is part of the contract with your insurer; no one can waive it for you.

3. The inflated or invented claim

Some contractors push the claim beyond what the storm did: "We can get you a whole new roof, not just the slope that's damaged," or "The adjuster will approve it if we describe it as hail." Photographs of old damage get presented as new, and sound shingles are cut to look wind-torn. When the claim is investigated, the contractor is rarely the only person on the hook; the claim is in your name. padding a claim: the penalties and the policy fraud clause explains what the fraud clause in your policy can do to a claim that has been inflated, and hail damage claims: roofs, siding and windows explains what genuine hail damage looks like to an adjuster.

4. The assignment that moves your claim

An assignment of benefits form, or a "work authorization" with assignment language buried in it, lets the contractor collect and negotiate the claim payment directly. Handled honestly, that is a convenience. Handled dishonestly, the contractor takes the insurer's money and your deductible, does a fraction of the work and leaves you to sort it out with an insurer that has already paid. Florida ended assignment of benefits for policies issued on or after January 1, 2023, after heavy litigation (see florida's 2022–2023 property insurance reforms explained), and other states restrict it differently. assignment of benefits: what to know before you sign has the rules.

Red flags, in the order they usually appear

1. A knock at the door or a flyer within days of the storm, from a crew with out-of-state plates or no local address.
2. A free inspection that always finds damage, often with photographs you cannot match to your roof.
3. An offer to "work directly with your insurance company" or "meet the adjuster for you."
4. A demand for a deposit of half the job or more, or payment in cash, or to an individual.
5. A contract with a vague scope ("repair roof") and a price that is just under, or exactly at, the insurer's estimate.
6. A refusal to give a state license number, proof of liability insurance, or references from local jobs.
7. Pressure to sign today because "prices go up after the weekend" or "we're only in town this week."
8. A suggestion that you do not need to tell your insurer, or that the damage should be described differently.

What to do in the first week

1. Report the claim to your insurer first. Do it before any contractor has a chance to define the damage for you. the first 48 hours after damage to your home covers the sequence.
2. Do emergency work only. A tarp, board-up and water extraction are things your policy expects you to do (see reasonable repairs: what you can fix before the adjuster comes). Keep the invoices. A permanent repair can wait for the adjuster's estimate.
3. Look up the license yourself. Do not accept a number from a card. Search your state contractor licensing board's lookup and check that the name, trade classification and status match. Not every state licenses roofers; where yours does not, ask for local references and verify the business's address.
4. Ask your insurer to confirm. Your insurer cannot vouch for a contractor, but it can tell you whether it requires its own contractor for any part of the work and whether a given company has submitted anything on your claim.
5. Get three written bids against the same scope. A bid far below the others has left something out. Details are in choosing a contractor after a home insurance claim.
6. Read every page before signing, and look for the words "assign," "all rights," "direction to pay," and "authorization to act on my behalf." A direction to pay, which only puts the contractor's name on the check, is different from an assignment.
7. Pay in stages tied to progress, by a traceable method, and get a lien waiver with each payment. In many states an unpaid subcontractor or supplier can place a lien on your home even if you paid the contractor in full.

If you already paid or signed

Call your insurer and tell the claims representative exactly what you signed. Ask the contractor, in writing, to cancel; many states give you a short cancellation window for contracts signed at home, and the contract should state it. Report the contractor to your state contractor licensing board, your state attorney general's consumer protection office and, for fraud tied to a claim, your state's insurance fraud bureau. NICB takes reports at 1-800-TEL-NICB, according to its public warnings. If the contractor is unlicensed, say so in each report. If money was taken and no work was done, file a police report as well; you will need it for a bank dispute or a civil claim.

Honest contractors will push back on the insurer's price

This is the opposite error, and it matters. After a widespread storm, material prices and crew rates commonly run ahead of the adjuster's estimate, and a legitimate contractor will document what the estimate left out and ask the insurer for a supplement (see supplemental claim). A bid above the insurer's number is not evidence of fraud. The difference is that an honest contractor puts the extra scope in writing, sends it through you or the insurer, and does not ask you to sign over the claim to get it paid.

Key takeaways

• Fraud after storms tends to be a deposit taken and not earned, a deductible waived by inflating the bill, an inflated claim, or an assignment that moves control of your claim.
• NICB reported in May 2026 that reported contractor fraud rose 38% from 2023 to 2025; treat that as a count of reports, not a precise measure of fraud.
• Waiving or absorbing your deductible is a felony for the contractor in Florida and is prohibited or restricted in many other states; the offer itself is the red flag.
• Verify the license yourself, call your insurer before you sign, and pay in traceable stages with lien waivers.
• If you were defrauded, preserve the paperwork and report it to your insurer, your state contractor board, your attorney general and local police.