Fraud Protection: What You Need to Know


Keep yourself and your property safe from contractor insurance fraud with these tried and true tips.

Whether it’s for the dream remodeling project you’ve been planning or for an important repair after a fire or storm, hiring a contractor is a big decision. Google reviews and online recommendations can help with your search, but there is always the unfortunate chance that the team you hire is more interested in making a quick buck from you than they are in repairing your home. While most contractors are good, there can sometimes be bad actors who are looking to take advantage of vulnerable homeowners, especially when the repairs involve an insurance claim. 

Insurance fraud is a crime that drives up insurance premiums for everyone. According to the Coalition Against Insurance Fraud, insurance fraud costs $80 billion a year across all lines of insurance. In property-casualty insurance, some form of contractor insurance fraud occurs in about 10% of losses. With the help of The Cincinnati Insurance Companies, here are a few things you need to know and several ways to protect yourself. 


Contractor fraud can happen anytime, but is most common after a natural disaster. Maybe your roof was damaged by hail or wind during a storm. Unscrupulous contractors follow storms around the country to prey on vulnerable homeowners. Many times, they solicit door-to-door and attempt to get victims to sign a contract. While getting repairs completed as quickly as possible is top of mind, it can result in letting your guard down and becoming a victim.


While your instincts may be to rush through the process of finding help to restore your property, taking the time to find the right contractor can save time, money and additional frustration in the long run.

Protect yourself from scams by considering these tips when someone offers their services:

  • Work with only licensed and insured contractors. 
  • Get more than one estimate. Don’t be pushed into signing a contract right away.
  • Get everything in writing. Cost, work to be completed, time schedule, guarantees, payment schedule and other expectations should be detailed.
  • Require references and check them out.
  • Ask to see the person’s driver’s license and write it down. Also, get their vehicle’s license plate number.
  • Never sign a contract with blanks. Fraudulent contractors may enter unacceptable terms later.
  • Never pay a contractor in full or sign a completion certificate until the work is completed.
  • Avoid paying with cash or a digital payment method. Use a check or credit card to have electronic records of your payments.
  • Make sure you review and understand all documents sent to your insurance carrier.
  • Do not believe a contractor who says they are endorsed or certified by the Federal Emergency Management Agency; FEMA does not certify or approve individual contractors or loan companies. Call FEMA, 800-621-FEMA (3362), for more information.


If you believe you’ve been approached by an unlicensed contractor or claims adjuster or have been encouraged to falsify an insurance claim, contact your insurance carrier or agent or the National Insurance Crime Bureau, 800-TEL-NICB (800-835-6422) for assistance.

There you have it, some easy, actionable tips to keep in mind each time you’re checking out new potential contractors to work with. If you have any further questions about contractor insurance fraud, reach out to The Feltner Group. We’re happy to work with you regarding your homeowners or other policies and will do what we can to educate you about the risks and warning signs of contractor insurance fraud.