Tips for Identifying Contractor Fraud

Contractor fraud is at an all time high in Florida, as we are one of the leading states experiencing these scams. Crimes of fraud cost homeowners and insurance companies billions of dollars each year. To help prevent these crimes from happening, homeowners should be aware of tactics these fraudulent contractors use. Follow some of our tips below to help you identify possible crimes and keep Florida fraud free!

No License or Verification

Most contractors are required to have a license and be registered with the state. Make sure your contractor provides you with their credentials and know they must carry general liability, property damage, and worker’s compensation insurance. You will see reliable contractors list their license number in advertisements of all forms. Remember there is no such thing as a “licensed handyman”, and if you’re using an independent contractor, ask to see both a professional and a driver’s license and make sure the names match. To confirm a valid license, you can go to and click “Verify a License”, or call (850) 487-1395.

Requiring a Cash Down Payment

Before any contractor starts working, they usually require a down payment. If you’re asked to pay the down payment in cash or make the check payable to cash or an individual instead of a company, it’s probably a scam. Typically, contractors only ask for a partial payment, payable to the company. Fraudulent contractors may also ask for a larger down payment, a payment in full, or insist insurance will cover the costs.

Not Providing Copies of Documents

Contractors should always provide you with copies of documents you’ve signed. Watch out for red flags, like contractors only asking for a verbal contract, and make sure you get your agreements in writing. A common fraud tactic is to use an electronic device to sign documents, without allowing time to review or provide a copy of the documents being signed. In these situations, the contractors may have you sign over all insurance benefits and proceeds to their companies as part of the repair process, this is typically called an Assignment of Benefits (AOB). If an AOB is signed, all funds and communication are made through the contractor and homeowners typically lose control of their claim.  Once your insurance carrier issues the settlement funds in the contractor’s name, unscrupulous contractors disappear from your job site leaving you to complete repairs on your own.

Having Uncertain Timelines or Hours

Trustworthy contractors provide clients with a certain timeline, sharing details of when materials will arrive, when repairs or construction will start, and about how long they will take to complete. Even when getting estimates for contractors, which we recommend getting at least three different ones, they will explain the types of materials being used and an expected timeline. Be weary of contractors whose only work hours are on the weekends or evenings, and never explain to you their plans for repairs and construction.

Avoid Contractor Fraud Consequences

If you hire an unlicensed contractor, even accidentally, you put yourself at risk of loosing money and having damaged and unfinished property. Whenever you experience damage or need repairs in your home, be sure to contact your insurance company directly so they can send a certified professional to your home for an inspection.

At Florida Peninsula Insurance Company, we take fraud extremely seriously and have many ways for you to report fraud directly to us. To report fraud on a Florida Peninsula policy, please call us at 866-923-2920 or you can send an email to To report fraud directly to the state of Florida you may do so by visiting, or by calling 800- 378-0445.

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