Residents may face increased exposure to exploitation and financial loss
Following deadly flooding in Central Texas that left widespread destruction across homes, schools, and businesses, the National Insurance Crime Bureau (NICB) is urging residents and business owners to be alert for potential contractor fraud in the recovery phase.
The catastrophic flooding prompted ongoing search and rescue efforts. As emergency response operations shift toward recovery, NICB announced it is coordinating with local, state, and federal law enforcement agencies, as well as insurers, to assist in the region.
NICB agents are expected to deploy in affected communities as rebuilding begins. The organization said its role is to support both recovery efforts and fraud prevention.
“Our hearts continue to be with the residents of Central Texas as they mourn the loss of friends and loved ones and continue to search for those missing after the severe weather that led to catastrophic flooding in Central Texas last week,” said Naimbi Tillman, Southwest regional director for NICB.Texas does not currently have a comprehensive statewide law governing post-disaster contractor practices, making it one of several states where residents may be more vulnerable to fraud following natural catastrophes. While some legislation has been introduced in recent years to address the issue, efforts have not advanced past the committee stage.
With these considerations in mind, Tillman noted that some contractors may exploit disaster situations by offering services, requesting signed benefits agreements, or collecting payments without completing work.
“Knowing the warning signs of potentially untrustworthy contractors can protect vulnerable citizens and deter this type of crime,” Tillman said.
The NICB said it typically sees fraud schemes involving offers for debris or tree removal, construction work, or even medical services. Residents are advised to verify the identity and credentials of contractors and confirm any work with their insurer before agreeing to services.
Common indicators of potential fraud include high-pressure sales tactics through door-to-door, online, or phone solicitation; contracts that include blank sections; demands for upfront payments; and requests to sign Assignment of Benefits agreements, which transfer the policyholder’s rights under the insurance policy to the contractor.
NICB issued a similar warning earlier this year following severe flooding in Eastern Kentucky and the Tennessee Valley. In that instance, the bureau alerted the public to recurring fraud patterns involving unlicensed contractors approaching affected residents under the guise of emergency repairs.
Insurance agents and brokers were encouraged to proactively inform clients of common red flags and to remind policyholders to coordinate with their insurance carriers before agreeing to any repair work.