NICB: Contractor Fraud Costs U.S. Residents Billions Yearly

With 28 separate natural disaster events costing at least $1 billion and totaling more than $93 billion in catastrophe losses, 2023 was a historic year for billion-dollar weather and climate disasters in the U.S.

That’s a big enough figure. However, up to 10% ($9.3 billion by 2023’s figure) is lost each year to post-disaster fraud, according to the National Insurance Crime Bureau.

NICB is highlighting the figures to celebrate Contractor Fraud Awareness Week, which runs May 20 to 24.

While hurricanes, tornadoes, and other catastrophic events leave millions of Americans struggling to recover and rebuild, these events also provide an opening for dishonest contractors looking to take advantage of homeowners. The fraud not only impacts individuals, but also impacts insurance premiums throughout the industry, according to the NICB.

“Contractor fraud costs hardworking Americans billions of dollars every year,” David J. Glawe, president and CEO of NICB, said in a statement. “After a natural disaster, fraudulent contractors work to exploit the vulnerabilities of unsuspecting homeowners with the promise of affordable renovations, repairs, or construction projects that leave behind a trail of broken promises, shoddy workmanship, and depleted savings.”

NICB partners with government agencies and insurance carriers to educate homeowners and businesses on how to avoid becoming victims of insurance fraud.

NICB recommends following these consumer tips before hiring a contractor: