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NICB Issues Warning on Rising Contractor Fraud in the U.S.

As the nation grapples with the aftermath of numerous natural disasters, a serious warning has emerged from the National Insurance Crime Bureau (NICB). Recognized for its commitment to combating insurance fraud, the NICB is bringing attention to the alarming increase in contractor fraud as communities attempt to rebuild from significant storm and disaster damage.

From May 18-22, the NICB is observing its sixth-annual Contractor Fraud Awareness Week, calling for heightened caution among homeowners and business proprietors. According to NICB President and CEO David J. Glawe, the vulnerability experienced by affected communities has become a focal point for unscrupulous contractors who prey on individuals striving to restore their lives. "Criminals recognize those moments of vulnerability as opportunities for financial exploitation," Glawe warns.

Staggering statistics underscore the issue: in 2025 alone, the U.S. faced 23 major billion-dollar disasters, leading to an approximate $115 billion in damages. Alarmingly, reported cases of contractor fraud surged by 38% from 2023 to 2025. This fraudulent activity not only burdens the insurance industry but also impacts policyholders and the well-being of communities.

The NICB highlights the tactics used by dishonest contractors who often visit neighborhoods affected by catastrophes, offering services for cleanup or repairs. While many of these contractors strive to help, others are less than genuine, demanding upfront payments for incomplete jobs, utilizing substandard materials, or failing to meet necessary building codes.

Sean Kevelighan, CEO of the Insurance Information Institute (Triple-I), emphasizes the importance of choosing qualified professionals. He states, "Working with reputable contractors and maintaining open lines of communication with insurance companies can expedite the recovery process and provide support for robust community rebuilding efforts. Taking time to ensure proper contractor selections is essential for successful repairs."

In response to the increased fraudulent activity, the NICB has ramped up efforts to educate the public. Throughout Contractor Fraud Awareness Week, the bureau is hosting educational programming focused on various issues, including hail damage and water mitigation scams driven by complex crime networks. Additionally, NICB is collaborating with prominent organizations like AARP and the Coalition Against Insurance Fraud to launch a public education campaign that offers resources and tips to consumers.

These resources, which include checklists and guides, are accessible on the NICB website and its social media platforms. For example, homeowners are encouraged to download NICB's contractor checklist for further insights on avoiding fraud following a disaster.

Here's a summary of key recommendations for homeowners:

Working With Insurance

• - Contact Your Insurer: Always inform your insurance company right away if you suspect damage following a disaster.
• - Review Documentation: Make sure you understand all documents from your insurer, especially Assignment of Benefits agreements, as they transfer your rights to the contractor.
• - Be Cautious: Don't let workers interpret your insurance policy's terms; stay informed and communicate directly with your insurance provider.
• - Verify Claims: Be wary of unsolicited calls claiming to be from your insurance company and never disclose personal information without validating their claim number. Remember, legitimate insurance companies won’t ask for upfront payments or deductibles over the phone.

Hiring a Contractor

• - Multiple Estimates: Always obtain several quotes from different contractors to make informed decisions.
• - Do Background Checks: Research contractors thoroughly and request references to gauge their reliability.
• - Verify Credentials: Ask for the contractor's identification to ensure authenticity and keep track of their license and plate numbers.
• - Avoid Pressure: Never feel rushed; trust your instincts and refuse offers that seem too hasty or high-pressure.

Completing Repairs

• - Written Agreements: Always get detailed written quotes that outline costs, timelines, and guarantees before agreeing to work.
• - No Blanks in Contracts: Ensure no sections of a contract are left blank—everything should be clearly stated before signing.
• - Hold Payments: Don't pay contractors in full or finalize completion certificates until the work has been satisfactorily completed.

The NICB remains dedicated to assisting communities through these formidable recovery periods. Its agents are mobilized to assess damages promptly and connect affected areas with vital recovery resources. As the NICB continues to combat contractor fraud, it also remains a crucial ally to homeowners striving to regain normalcy after catastrophic events. For more information or to access the online resources, visit NICB.org.

By taking proactive measures and selecting trustworthy professionals, homeowners can better navigate the recovery process, reduce the risk of fraud, and participate in restoring their communities to strength and resilience.