As severe weather losses continue to climb across the United States, the insurance industry is facing another costly trend: contractor fraud.

According to the National Insurance Crime Bureau, contractor fraud incidents rose 38% between 2023 and 2025, coinciding with a surge in billion-dollar catastrophes nationwide. Climate data cited by the organization showed the U.S. experienced 23 separate billion-dollar disasters in 2025 alone, which generated an estimated $115 billion in damages.

For insurers, the financial consequences extend well beyond individual claims. Fraudulent contractor activity can inflate claim severity, increase litigation exposure and contribute to upward pressure on premiums. Common schemes now include manufactured roof damage, inflated water mitigation invoices, abuse of assignment-of-benefits agreements, falsified documentation and targeting elderly homeowners after disasters.

In a release, NICB President and CEO David J. Glawe said fraudsters increasingly exploit vulnerable communities immediately following catastrophes, when homeowners are eager to rebuild quickly. The organization noted that storm-chasing contractors often pressure insureds into signing incomplete contracts, demand large upfront payments, or discourage direct communication with insurers.

Industry professionals are also seeing growing concern around coordinated fraud activity. Discussions among adjusters and roofing professionals online highlight disputes involving alleged intentional property damage, inflated repair demands and aggressive appraisal tactics that carriers increasingly view as organized fraud operations.

In response, NICB said its agents continue to deploy to major catastrophe zones to support insurers and law enforcement agencies investigating fraud trends. The organization is also expanding FraudSmart educational programming for Special Investigative Units and collaborating with groups, including the Insurance Information Institute, AARP and the Coalition Against Insurance Fraud on consumer awareness efforts.

"Contractors play a key role in turning disaster damage into recovery for families, businesses, and communities," Sean Kevelighan, CEO, Insurance Information Institute, said in a release. "Working with qualified professionals and maintaining open communication with insurers can help homeowners and businesses recover more efficiently and strengthen communities for the future. Taking care in selecting who performs the work can help ensure repairs are completed properly and support stronger recovery outcomes."

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