With extreme storms becoming the “new normal” in the U.S., insurance fraud experts are warning insurance agents about how to advise their customers—especially the elderly–about an increase in bogus repair work by shady contractors.

Most home contractors are honest. But extreme weather will attract more shady operators whose bogus repairs can cost homeowners thousands of dollars, according to the Coalition Against Insurance Fraud, an alliance of consumer groups, insurance companies and government agencies.

A new report by Environment America, based on data from the National Climatic Data Center, finds that extreme rainstorms and snowstorms in the U.S. are happening 30 percent more frequently on average since 1948. Heavy downpours that used to happen once every 12 months on average now happen every 9 months on average. Moreover, the biggest storms are getting bigger. The largest annual storms nationwide now produce 10 percent more precipitation on average than they did 65 years ago.

The increase in damages arising from such extreme weather makes the pickings ripe for fraudulent contractors.

“We don't have statistical reports on contractor fraud or the most common kinds of contractor fraud,” said Frank Scafidi, director of public affairs at the National Insurance Crime Bureau (NICB). “However, just from the information that I get from our agents around the country, I can tell you that we see a lot of scams involving structure repairs (roofs, siding, etc.) after storms.”

In major disaster cleanup, it is also fairly common to run into contractors who descend into an area and solicit repair and rebuilding business from victims, Scafidi said. “Many of these people will sweet talk homeowners into advancing large sums of money to buy materials but then never return to do the work,” he said. “It happened after Katrina and it will most likely happen as people begin to rebuild in areas devastated by the recent wildfires.”

Dishonest drifters often go door to door, especially after disasters, said James Quiggle of the Coalition. Fixing bad repair work also can take months of headaches, and the victim's homeowner policy may not cover fraudulent repairs. Even routine home fixups and remodeling can be an invitation for contract scams.

Read related: “Florida Contractor's Sinkhole Fraud Uncovered.”

The Coalition recommends that consumers avoid door-to-door drifters, verify licenses, insist on a contract, screen contractors through the Better Business Bureau, and work with a reputable insurance company and agent to prevent getting scammed.

Here are the six most common contractor scams, according to the Coalition:

1. Disappearing downpayments. The contractor demands a large downpayment, then disappears after doing little or no work.

Real-life example: A large-scale construction scam in Montana resulted in dozens of homeowners and former employees being bilked out of thousands of dollars while leaving homes roofless in the middle of winter. John Mulinski procured significant sums of money upfront, then took off without finishing the work. One homeowner paid Mulinski $30,000 and was left with nothing but a tarp overhead. The resulting damage to the home cost the homeowner another $29,000 to repair.The Montana Dept. of Labor and Industry began investigating Mulinski last year.

2. Shoddy work. The work is low quality, using cheap materials. You may have to redo the entire job, often at your own expense.

Real-life example: Sharon Gonzales of Las Cruces, N.M. hired contractor Gary Winsor to fix her roof and install a heating and cooling system. She paid him She paid Winsor $6,000 upfront. He tore up her roof and then bolted without finishing the work. Gonzales had to hire another contractor to do the job right, costing her far more money. The Las Cruces man will serve eight years in federal prison, the court ruled in late April. Gonzales was among dozens of homeowners Winsor defrauded. Courts also have imposed civil settlements involving at least 50 lawsuits by customers.

3. Phantom damage. A contractor invents storm damage. Nicking sidewall or roof shingles with a screwdriver to mimic hail damage is one come-on.

Real-life example: Reps hired by Precision Builders canvassed homes in Camden County, New Jersey, convincing homeowners their dwellings were banged up by a hailstorm, and told them their insurance would pay for new siding or a roof. The reps then created seeming hail dents or nicks before insurance adjusters arrived. Travelers Insurance then paid the claims, with Precision pocketing the loot. The firm and ringleader Dominik Sadowski pleaded guilty in late March. Precision still faces criminal charges in Pennsylvania, and a $1-million lawsuit by Travelers Insurance.

4. Worsens damage. Contractors enlarge holes in a roof to increase their billings. Billing for phantom work is another ruse.

Real-life example: A recent sting in Georgia undertaken by Georgia Insurance Commissioner Ralph Hudgens and a local TV station revealed numerous instances of roofing fraud in which perpetrators “found” roof damage that they made themselves, or enlarged existing damage, then marking the “damaged” areas with chalk for insurance companies to observe. Three roofing contractors were arrested in Haralson County on a variety of charges made by local and state officials.

5. Pay your deductible. Offering to pay your insurance deductible is a con to lure your business.

Real-life example: Offering to pay storm victims' insurance deductibles to make the sale of a new roof was part of the MO of the Georgia scammers arrested in the case above. The result was a new state law specifically prohibiting the practice.

6. Insurer go-between. The contractor elbows in as the go-between with your insurer. You lose control over your valuable claim.

Real-life example: In the Mulinski fraud case above, one homeowner said Mulinski began bypassing him and going directly to his insurance company, where he was able to obtain money.

Special Reports /

Slideshow: 6 Worst Contractor Scams

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