NICB Warns Texans of Increased Contractor Fraud Risk Following Severe Flooding
OAK BROOK, IL, July 31, 2026 – As communities across Texas recover from severe storms and flooding, the National Insurance Crime Bureau (NICB), the insurance industry’s association dedicated to predicting, preventing, and prosecuting insurance crime and fraud is warning homeowners and business owners to be alert for dishonest contractors and insurance-related scams.
Fraudulent contractors frequently target disaster-affected communities with high-pressure sales tactics and promises of immediate repairs to persuade property owners into signing contracts and surrendering their insurance benefits. Some unscrupulous vendors may demand large upfront payments, perform unnecessary or incomplete work, or encourage policyholders to exaggerate damage.
“As Texans affected by these devastating floods begin the process of rebuilding their homes and communities, fraudulent contractors seeking to exploit this disaster for financial gain begin pouring into these areas in attempts to exploit recovery funds,” said David J. Glawe, President and CEO of NICB. “Before anyone signs on for repairs, it is important to contact your insurance carrier, carefully review every document and verify that the contractor is properly licensed and qualified to perform the service.”
NICB offers consumers a free downloadable contractor checklist to help evaluate contractors before hiring them at https://www.nicb.org/media/2509/download/.
Review these tips to avoid fraud after a catastrophe:
Working With Insurance
- Call your insurance company first if you think you might have damage from a storm or other disaster.
- Make sure you review and understand all documents sent to your insurance carrier. Signing an Assignment of Benefits agreement transfers your insurance rights to the contractor. Know what that means for you.
- Never let a contractor interpret the language of your insurance policy or discourage you from contacting your insurance company.
- Be on the lookout for people calling and saying they are with a national carrier. Do not provide ANY personal information over the phone without them first confirming a claim number. If something sounds fishy, report it to your insurance company immediately.
- Note that insurance carriers will never ask you to pay your deductible up front or over the phone.
Hiring a Contractor
- Get more than one estimate.
- Request references and do the research.
- Ask to see the salesperson’s driver’s license and write down the license number and their vehicle’s license plate number.
- Look out for out-of-state contractor licenses and vehicle registrations, as these may indicate possible fraudulent contractors.
- Never let a contractor pressure you into making a quick decision or hiring them.
- Remember, if you didn’t request it, reject it!
Getting the Work Done
- Get everything in writing. Cost, work to be done, time schedules, guarantees, payment schedules, and other expectations should be detailed and itemized.
- Never sign a contract with blanks; terms you don’t agree with can be added later.
- Never pay a contractor in full or sign a completion certificate until the work is finished.