The National Insurance Crime Bureau (NICB) is marking the sixth annual Contractor Fraud Awareness Week by warning homeowners, businesses, and insurers about the growing risk of contractor fraud following natural disasters and severe weather events. The organization says fraudsters continue to exploit communities recovering from tornadoes, floods, wildfires, and other catastrophes by offering repair services that ultimately leave property owners with financial losses and incomplete or substandard work.
NICB reported that contractor fraud incidents increased 38% from 2023 to 2025. The warning comes as disaster losses continue to mount nationwide. According to climate data cited by the organization, the United States experienced 23 billion-dollar disasters in 2025, resulting in approximately $115 billion in damages. As recovery efforts accelerate after major events, dishonest contractors often move into affected areas seeking opportunities to profit from vulnerable homeowners.
For insurance claims professionals, contractor fraud remains a persistent challenge that can increase claim severity, prolong restoration timelines, generate disputes over repair quality, and complicate investigations. Fraud schemes frequently involve manufactured roof damage, inflated water mitigation invoices, abuse of assignment of benefits agreements, falsified documentation, and targeting of elderly property owners. These activities can create additional costs for insurers while delaying recovery for policyholders.
NICB also noted that contractor fraud schemes are becoming increasingly sophisticated and are often connected to organized criminal activity. The trend highlights the importance of thorough claim reviews, contractor vetting, documentation verification, and close collaboration between adjusters, SIUs, carriers, contractors, and law enforcement agencies.
The organization continues to deploy agents to major catastrophe zones to assess damage, support recovery efforts, and coordinate with local, state, and federal authorities. During Contractor Fraud Awareness Week, NICB is also providing fraud-focused training for insurer investigative teams and partnering with consumer advocacy and insurance organizations to educate the public on recognizing and avoiding contractor fraud.
