07/16/2024
Scam artists often follow a large storm or disaster. The Texas Department of Insurance (TDI) has tips to help recognize and avoid common contracting scams.
Common contracting scams
The scam: A contractor asks you to sign something before giving you a repair estimate.
What to do: Read any paperwork carefully. Make sure it’s not a contract, or you could get stuck paying a bill without ever seeing an estimate.
The scam: A contractor asks you to sign a contract with blank sections.
What to do: Don’t do it. Never sign a contract with blank spaces. The contractor could fill those in later with higher costs or different work.
The scam: Contractor offers to waive your deductible or “work it into the bid.”
What to do: Hire a different contractor. It’s illegal for a contractor to waive a deductible or promise a rebate for the amount. The deductible is your responsibility, and your insurance company may ask for proof you paid it.
The scam: Contractor asks for a large down payment or full payment up front.
What to do: Never pay the entire bill up front and be wary if a contractor asks for a large down payment. When a disaster is declared, it’s against the law for contractors from outside your area to ask for payment before they start work.
Select a good contractor
To avoid these and other scams:
Try to use a local company if possible.
Don't pay with cash. Paying with a check or credit card creates a record of your payments to the contractor.
Get multiple bids to help determine which ones are too high or too good to be true.
Bid should include the company’s name, phone number, and address.
Call the Better Business Bureau and check the contractor’s references.
Ask for the contractor’s certificate of insurance and bond certification. Call the companies listed to verify the coverage.
Ask the contractor to tell you if they contact your insurance company about more work or costs.
Report possible contracting scams to local law enforcement.
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