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Avoiding Contractor Fraud After Disasters 

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Avoiding Contractor Fraud After Disasters 

In 2023, the United States experienced 28 billion-dollar climate catastrophes, and 2024 is already seeing severe weather events. In the aftermath of these disasters, vulnerable homeowners often fall prey to fraudulent contractors. 

Contractor Fraud Awareness Week 

The National Insurance Crime Bureau (NICB) aims to combat this issue through its annual Contractor Fraud Awareness Week, observed this year from May 20 to 24. The NICB reports that contractor fraud accounts for about 10% of disaster-related costs each year, amounting to approximately $9.3 billion in 2023. This fraud hampers rebuilding efforts and can lead to higher insurance premiums. 

Protecting Homeowners 

David J. Glawe, president and CEO of NICB, emphasizes the significant financial toll contractor fraud takes on Americans. Fraudulent contractors exploit disaster victims by promising affordable renovations, repairs, or construction projects, only to deliver substandard work and deplete homeowners’ savings. 

Homeowners must be proactive to avoid scams after a disaster. Steps include contacting their insurer to understand their coverage, and seeking licensed, insured, and well-reviewed contractors before scammers strike. Insureds should research contractor credentials, obtain multiple quotes, and watch for red flags indicating potential fraud. 

Common Contractor Fraud Red Flags 

The NICB highlights several red flags to watch for: 

Claims of approval by FEMA or other agencies. 

Out-of-state contractors appearing after a disaster. 

Requests for upfront payment to schedule work. 

Offering unsolicited services. 

Pressuring to quickly sign electronic documents. 

If you believe you have encountered or witnessed contractor fraud, report it immediately to the NICB at (800) 835-6422. 

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