Guides
Home insurance scams and how to avoid them
The main scams aimed at homeowners, from fake policies and storm-chasing contractors to phishing and deed theft, with the checks that stop each one.
Most home insurance scams fall into six types: a fake policy sold by someone who is not licensed, a contractor who takes your claim money and disappears, a fake adjuster or "claims specialist," a phishing message posing as your insurer or mortgage servicer, a disaster-aid impersonator, and a forged deed. All six work the same way. The scammer creates urgency, asks for money or personal information, and steers you away from the one phone call that would expose them: to your state department of insurance, your insurer, or your county recorder.
This guide is the map. Each scam has its own guide with the detail, linked below.
The six scams, side by side
| Scam | Typical moment | What the scammer wants | The check that stops it |
|---|---|---|---|
| Fake agent or phony policy | Shopping for a cheaper policy, or a lapse before closing | Premium payments for coverage that does not exist | Confirm the company and the agent with your state insurance department before paying |
| Storm-chasing contractor | Days after hail, wind or flooding | A deposit, your signature on an assignment, sometimes your deductible-free "deal" | Verify the license yourself; call your insurer before signing |
| Fake adjuster or claim "helper" | After you file a claim | A fee, or control of your claim | Ask for the adjuster's license number and confirm it with the state |
| Phishing and impersonation | Any time, but spikes at renewal and after a claim | Login credentials, card numbers, wire transfers | Contact the company at a number you already trust, not the one in the message |
| Disaster-aid fraud | After a federal disaster declaration | Fees for "guaranteed" grants, Social Security numbers | Real aid workers never charge; call the agency's own helpline |
| Deed or title fraud | Any time, often when a home is vacant or owned free and clear | The house itself, or a loan against it | Sign up for your county recorder's fraud alert |
Why homeowners are a target
Three conditions make this market attractive to fraudsters. Premiums have risen sharply in many states, which makes a quote 30% below everyone else's tempting (see the home insurance affordability crisis: what the data show). Claims are paid in large sums, often to people who have never filed one and do not know what a normal process looks like. And disasters put thousands of people in the same stressful position at the same time, with insurers' phone lines jammed and strangers offering help.
The National Association of Insurance Commissioners (NAIC) describes the insurer-side versions as bogus insurers collecting premiums for policies they never intend to honor, and as agents who keep premiums instead of forwarding them to the insurer. The NAIC's consumer advice on its insurance fraud page is three words long: Stop. Call. Confirm. Call your state insurance department to confirm that the company exists and is authorized to sell insurance in your state, and get the coverage details in writing before you pay.
Warning signs that apply to almost every scam
- Pressure to decide today. A real agent will wait while you read a quote. A real contractor will wait while you call your insurer.
- Payment by a route that cannot be reversed. Wire transfers, gift cards, cryptocurrency and cash are the preferred tools of people who do not want to be found. An agent who asks you to pay premiums into a personal account, or a "check" payable to a person rather than the insurer, is telling you something.
- A price far below the market. The NAIC lists premiums 15% to 20% lower than comparable coverage elsewhere as a warning sign of a bogus insurer.
- No paperwork. You should receive a written policy or binder, a declarations page and an ID card within a reasonable time. If you receive a receipt and a promise, you do not have insurance.
- Contact details you cannot verify. A company with only a web form and a mobile number is not necessarily fake, but you should be able to find it on your state regulator's lookup before you rely on it.
- A request to keep your insurer out of it. Anyone who says calling your insurer "will only slow things down" has told you which call to make first.
What to do in the first hour of a suspected scam
- Stop paying. If you sent a payment, call your bank or card issuer at once; a card dispute or a recall request on a wire has the best odds in the first hours.
- Do not delete anything. Keep texts, emails, contracts, receipts, business cards and a note of the phone numbers used.
- Verify the coverage or the claim directly. Call your insurer using the number on your declarations page or your last bill. Ask whether the policy or claim the scammer mentioned exists.
- Report it. Where you report depends on the scam, and the specific guides give the channels. For insurance-related fraud, the NAIC runs an Online Fraud Reporting System that routes reports to the right state insurance department. For anything involving a message, the FTC takes reports at ReportFraud.ftc.gov.
- Protect your identity. If you gave a Social Security number, bank login or card number, go to IdentityTheft.gov, the FTC's recovery site, and consider a credit freeze.
What is not a scam, though it looks like one
Some legitimate practices get mistaken for fraud and are worth separating out. Your mortgage servicer asking for proof of insurance is routine (see mortgagee clause and insurance binders and proof of insurance at closing). A direct-repair program run by your insurer is a real offering, though you are free to decline it (see choosing a contractor after a home insurance claim). A licensed public adjuster charges a percentage of your claim and is permitted to do so in most states, within the state's fee rules; public adjusters: when to hire one and what they cost covers how to tell a licensed one from an unlicensed one. And surplus lines insurers, which are not "admitted" in your state, are legal and regulated through a different channel (see admitted vs surplus lines home insurers: what you give up). The difference between these and a scam is that you can verify each with the regulator.
Separate fraud by consumers
Some of what is called home insurance fraud is committed by policyholders, not against them: inflating a claim, claiming items that were never lost, or setting a fire. That is a different subject, with its own consequences for you, covered in homeowners insurance fraud: what it is and how it's caught, padding a claim: the penalties and the policy fraud clause and arson, staged losses and fraud investigations. Be aware that a contractor who suggests you pad a claim is committing fraud and is asking you to join in; the liability would land on you as well.
Key takeaways
- Nearly every home insurance scam depends on urgency and on keeping you from calling your state insurance department, your insurer or your county recorder.
- Verify before you pay: the NAIC's advice is to confirm with your state regulator that an insurer is authorized in your state and to get coverage in writing.
- Never pay premiums or deposits by wire, gift card, cryptocurrency or to an individual's personal account.
- If you suspect a scam, stop paying, preserve every message, call your bank, and report to your state insurance department and the FTC.
- The individual guides on contractors, fake policies, phishing, disaster fraud and deed theft give the specific checks for each.