NewsCovering Louisiana


Tips to avoid contractor fraud

Posted at 4:22 PM, Oct 14, 2020
and last updated 2020-10-14 17:22:00-04

As Southwest Louisiana residents work to rebuild their homes and communities, they should pay special attention to who is doing the work, says Allstate’s National Catastrophe Team.

Insurance fraud costs Americans more than $40 billion each year—translating to $400 to $700 a year for the average U.S. family—according to the FBI.

Here are five tips every resident should know right now:

  1. Beware of contractors who solicit door-to-door. Only work with established, licensed contractors with a solid reputation. Ask for references. All contractors should be licensed, bonded and insured, and they should have documentation on hand.
  1. Research fraud complaints. Victims of fraud often file a complaint. Check with the Better Business Bureau (BBB) to find out if complaints have been filed against contractors you are considering.
  1. Never let work begin on your home or business until the contract is finalized. Never sign a contract with blanks. Any agreement should – at a minimum – include the contractor’s name, business, phone number and address. If anyone performs unauthorized work on your property and demands payment, consider contacting authorities. Don’t let them pressure you.
  1. Avoid payment in full upfront. Some contractors may require a partial upfront payment, but the amount should not exceed about 20% of the total estimate. Do not pay a contractor in full or sign a completion certificate until the job is completed and you are satisfied with the work. Avoid making cash payments.
  1. Don’t let anyone persuade you to seek reimbursement for nonexistent or exaggerated losses or damage. This is insurance fraud, and it’s a felony.

A quarter of Americans said they’re not comfortable meeting with contractors, insurance claims adjusters, tree removal services or other necessary home improvement professionals amid COVID-19, according to a national Allstate study.

In Louisiana, contractors are required to be licensed by the state. To check on the license of someone who wants to do work on your property, click here to check the state's database.