Contact: Jennifer Bowen
(334) 269-3550

5/22/2023

The Alabama Department of Insurance (ALDOI) is joining forces with the National Insurance Crime Bureau (NICB) during NICB’s Contractor Fraud Awareness Week to educate homeowners on how to avoid becoming a victim of deceptive contractors after a natural disaster.

These natural disasters can leave millions of Americans across the country struggling to recover from these catastrophic events and rebuild their lives. Unfortunately, these events also provide an opening to dishonest contractors looking to take advantage of homeowners. In 2021, insurers paid $92 billion in catastrophe losses, with 10% or $9.2 billion lost to post-disaster fraud. This translates to hundreds of dollars in a homeowner’s annual premium. To address this issue, NICB  is hosting its third annual Contractor Fraud Awareness Week (CFAW) from May 22nd through May 26th.

“Catastrophic events impact millions of Americans every year, including those in Alabama and we are especially grateful to Governor Ivey for helping highlight this important issue,” said David J. Glawe, President and CEO of NICB. “From hurricanes to floods and everything in between, these events are often scary and life changing. But what makes these events even worse is what happens afterward as homeowners affected by these natural disasters are targeted by dishonest contractors. Often before the flood waters recede or rescue operations are complete, unscrupulous contractors prey upon individuals who are at their most vulnerable. Before hiring anyone, call your insurance company first. If you didn’t request it, then you should reject it.” 

“I want to thank Governor Ivey for signing this proclamation to highlight this import issue.  Storms are part of life in Alabama and after a storm passes, unscrupulous contractors may take advantage of people in need of repairs,” said Alabama Insurance Commissioner Mark Fowler. “We want Alabamians to know the signs of fraud so they can protect themselves and so they can identify a good contractor from one who may not have their best interests at heart.”

“After experiencing storm damage, our first instinct is to hire someone as quickly as possible to put our homes and lives back together,” said Alabama State Fire Marshal Scott Pilgreen. “But your home is your biggest investment. The best first step Alabamians can take is to slow down and carefully check out the credentials of any contractor you’re considering hiring so you don’t become a victim of fraud.” 

NICB recommends reviewing the following tips before hiring a contractor for services: 

- Be wary of anyone knocking on your door offering unsolicited repairs to your home.  
- Be suspicious of contractors who try to rush you, especially on non-emergency or temporary repairs.  
- Be on the lookout for change order fraud, when a corrupt contractor submits fraudulent change orders to increase the work price or improperly extend a contract without your permission.
- Do not believe a contractor who says they are supported by the government. The Federal Emergency Management Agency (FEMA) does not endorse individual contractors or loan companies. Call FEMA toll-free at 800.621.FEMA for more information.  
- Be selective in choosing a contractor. Consider recommendations from trustworthy sources, such as family, friends, and neighbors, or search online.  
- Get at least three written estimates for the work and compare bids. Check credentials with the Better Business Bureau or state attorney general’s office to see if the contractors have any outstanding complaints.  
- Always have a written, detailed contract that clearly states everything the contractor will do, including prices for labor and materials, clean-up procedures, and estimated start and finish dates.  
- Never sign a contract with blank spaces. A crooked contractor could alter after they receive your signature.  
- Never pay for work upfront. Always inspect the work and make sure you’re satisfied before you pay. Most contractors will require a reasonable down payment to start but do not pay anything until you have a written contract.  
- Avoid paying with cash; use a check or credit card instead. This creates a record of your payments to the contractor.  
- Download a copy of the NICB Post-Disaster Contractor Search Checklist, which walks victims through the contractor hiring process.   
 
Report Fraud 

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800.TEL.NICB (800.835.6422) or submitting a form on our website. 

ABOUT THE NATIONAL INSURANCE CRIME BUREAU: Headquartered in Des Plaines, Ill., the National Insurance Crime Bureau (NICB) is the nation's leading not-for-profit organization exclusively dedicated to combatting and preventing insurance crime through Intelligence, Analytics, and Operations; Education and Crime Prevention; and Strategy, Policy, and Advocacy. NICB is supported by more than 1,200 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $582 billion in insurance premiums in 2021, or more than 82% of the nation's property-casualty insurance. That includes more than 96% of the nation's personal auto insurance. To learn more, visit www.nicb.org.