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Homeowners Insurance

Florida Homeowners: Don’t Become a Victim of Contractor Fraud

What’s the saying? If it sounds too good to be true, it probably is? The same also applies when you’re seeking professional assistance for home improvement or home repair projects.


What Is Contractor Fraud?

Contractor fraud refers to illegal or unethical practices by individuals or companies hired to perform construction, renovation, repair, or other types of work on properties. Contractor fraud can take various forms, including:


  • Billing for uncompleted work
  • Substandard work and/or materials
  • Abandonment of job
  • Inflating the cost of labor or materials
  • Offering/accepting kickbacks or bribes
  • Misrepresenting qualifications, licensing, or insurance coverage
  • Utilizing change orders to unfairly increase price or extend project timeline
  • Requesting upfront payment for materials never delivered
  • Billing for phantom subcontractors/employees


For Florida homeowners, the most frequent contractor fraud scams occur with roof repair. Often, unscrupulous contractors will prey on homeowners desperate to quickly fix their roof after a hurricane or storm. These contractors may require cash payment up front – then disappear before the work is completed or has even begun! In some cases, they intentionally cause damage to a roof in order to inflate their estimate, especially for insured homeowners. You might think a contractor ripping off the insurance company doesn’t hurt homeowners, but you’d be wrong.


Why It’s Important to Stop Contractor Fraud

There are two main reasons to avoid and report suspected incidents of contractor fraud:


  1. It costs you now. Homeowners lose two times with contractor fraud: First, by paying for subpar work, and second, by having to pay again to complete the unfinished work or, repair damage the first contractor caused.
  2. It costs you in the future. Insurance premiums go up for everyone when insurers experience significant losses due to contractor fraud. So, if your neighbor is in cahoots with a contractor who is intent on ripping off their insurance company, don’t be surprised when your premiums go up in subsequent years.


How to Protect Yourself from Contractor Scams

Because contractor fraud can lead to significant financial losses for Florida homeowners, it’s important to do a little research before committing to a particular contractor or company.


1. Are They Licensed?

Perhaps most important is to use only contractors who are licensed by the Florida Department of Business and Professional Regulation (DBPR). You can quickly verify whether a contractor has an active state license online.


2. Check References & Read Before Signing!

Also, ask for references – and contact them. Be sure to read through any documents you sign. Do not, for example, allow a contractor to take you straight to the signature block on an electronic or hard copy document without being able to read it first.


3. Workers’ Comp Coverage?

You should also contact Florida’s Department of Financial Services, Division of Workers’ Compensation to ensure the contractor you’re considering has liability and workers’ comp coverage, in case a worker of theirs is injured on the job, on your property. You can do this by calling (850) 413-1609 or searching their proof of coverage database. Even out-of-state contractors must comply with Florida workers’ comp requirements. You can even report an employer you suspect doesn’t have proper coverage. 


4. Other Red Flags

The following are red flags to look out for when you’re in need of various home improvement/repair work. Avoid contractors who:


  • Contact you via door-to-door or other unsolicited forms of contact, such as calls, texts, emails you didn’t initiate
  • Require you pay in cash
  • Require payment in full before work is begun
  • Urge you to act immediately
  • Offer you a discount for leftover/excess materials 
  • Ask you to get the required permit(s)


5. Deposits: What’s Normal?

Contractors often ask for a deposit before beginning work. Be aware Florida law requires contractors who collect more than 10% up front must apply for a permit within 30 days and begin work within 90 days.


Report Contractor Fraud

If you become aware of a contractor operating without a license in the state, file a complaint with the DBPR by either calling (850) 487-1395 or file a complaint online.


Does a Contractor Owe You Money?

If you’ve suffered monetary losses due to misconduct by a licensed contractor or construction company, and have exhausted all means of getting your money back, you may be eligible to tap into $24 million set aside for just this purpose. Find out more about the Florida Homeowners’ Construction Recovery Fund on the DBPR website.


Let’s Put a Stop to Contractor Fraud in Florida

Want to be a homeowner hero? If you suspect contractor fraud, deliver a knockout punch against this crime by (1) not becoming a victim, and (2) helping your fellow homeowners also avoid being victimized by reporting suspicious contractor activity to the Florida DBPR.


If you need homeowners insurance – or are looking to switch carriers – get your online quote now or call us at The Windward Insurance Agency at (866) 231-2433. We can set you up with homeowners insurancecondo insurancerenters insuranceflood insuranceauto insurance, and so much more.