Restoration Company Scams: How to Identify Storm Chasers, Inflated Billing, and AOB Fraud

After a hurricane, flood, or major storm, some of the first people knocking on your door won’t be neighbors checking on you. They’ll be restoration company representatives, many from out of state, offering to “handle everything” with your insurance company. Some of these companies are legitimate. Many are not.

The National Insurance Crime Bureau estimates that fraud adds 10% to 20% to the cost of property insurance claims in the United States (NICB, 2024). Storm-related fraud spikes dramatically after major weather events. After Hurricanes Helene and Milton in 2024, the FBI and state attorneys general in Florida, Georgia, and North Carolina issued warnings about restoration fraud targeting disaster victims.

Understanding the most common scams protects you from financial loss, denied insurance claims, and substandard work that creates bigger problems down the road.

Storm Chasers: Who They Are and How to Spot Them

Storm chasers are restoration or roofing companies that travel to disaster areas to solicit work door-to-door immediately after a major weather event. While traveling for storm work isn’t inherently fraudulent, the business practices of many storm chasers are.

The typical storm chaser playbook works like this: they show up within hours or days of a storm, offer to inspect your property for “free,” claim to find extensive damage (sometimes more than actually exists), pressure you to sign a contract on the spot, and promise to “handle everything with your insurance.” They may ask you to sign an Assignment of Benefits form that transfers your insurance claim rights to them.

Red flags that identify storm chasers include unsolicited door-to-door visits immediately after a storm, out-of-state license plates and no local business address, pressure to sign contracts before you’ve had time to research the company, requests for large cash deposits before work begins, claims that they need to “start immediately” or you’ll lose your insurance coverage (this is almost never true), and business cards with only a cell phone number and no verifiable physical address.

“After Hurricane Helene, we saw dozens of out-of-state companies flood into Western North Carolina with no local reputation, no verified credentials, and aggressive sales tactics,” says a Buncombe County emergency management official. “Homeowners who took the time to verify credentials before signing contracts consistently got better outcomes.”

Your best protection: never sign a contract during the first visit. Take 24 hours to research the company. Verify their license with your state’s contractor licensing board. Check their Google Business Profile and online reviews. Call their references. A legitimate company will give you the time to do this.

Assignment of Benefits (AOB) Fraud

An Assignment of Benefits is a legal document that transfers your insurance policy rights to a third party, typically a restoration company. Once you sign an AOB, the restoration company can file claims, negotiate with your insurance company, and receive payment directly without your involvement.

AOB agreements aren’t inherently fraudulent. They can simplify the process for homeowners who don’t want to manage the claims process. But AOB abuse has become a significant problem in the restoration industry, particularly in Florida, where AOB lawsuits increased from 405 in 2006 to over 79,000 in 2023 before legislative reforms began curbing the trend (Florida Office of Insurance Regulation, 2024).

The most common AOB scam works like this: a restoration company asks you to sign an AOB before providing any estimate. They then perform the work and submit an inflated invoice directly to your insurance company. If the insurer disputes the charges, the restoration company sues the insurer. Meanwhile, if your insurer pays less than the company billed, the company may come after you for the balance.

Before signing any AOB, read the entire document and make sure you understand what rights you’re transferring. Ask whether the company can pursue you for the balance if insurance doesn’t pay the full amount. Get a written estimate of the total cost before signing. Consult with your insurance agent or a public adjuster about the implications. Consider whether you can manage the claim yourself with the help of your insurance adjuster.

Several states have enacted AOB reform legislation that provides consumer protections. Florida’s 2023 reforms required itemized invoices, limited the ability of assignees to pursue litigation, and created a right to rescind AOB contracts. Check your state’s current laws before signing.

Inflated Billing and Scope Creep

Billing fraud in restoration takes several forms. The most common is inflating the scope of work beyond what the damage actually requires. A company might bill for replacing drywall in rooms that only needed drying, charge for unnecessary demolition, or list equipment that was never deployed on your project.

Xactimate is the industry-standard estimating software used by roughly 80% of property insurers (Verisk, 2025). Legitimate restoration companies write estimates using Xactimate line items with standardized pricing. Fraudulent operators may submit estimates with inflated quantities, unnecessary line items, or pricing that exceeds local market rates.

Warning signs of billing fraud include estimates that seem unusually high compared to other quotes, refusal to provide itemized invoices, billing for work or equipment you didn’t see performed or deployed, charges for “emergency” rates when the situation didn’t constitute an emergency, and significant scope increases without your prior written approval.

Protect yourself by getting multiple estimates before committing to a company. Request detailed, itemized estimates using Xactimate. Document the damage yourself with photos and video before any work begins. Compare the restoration company’s estimate with your insurance adjuster’s assessment. Ask questions about any line item you don’t understand.

“The homeowners who get taken advantage of are usually the ones who didn’t ask for a written estimate and didn’t understand what was being billed,” says Amy Bach, executive director of United Policyholders, a consumer advocacy organization. “Take the time to understand the scope of work before it starts.”

How to Verify a Restoration Company’s Credentials

Before hiring any restoration company, especially after a disaster when urgency feels high, verify these credentials:

Check state contractor licensing through your state’s licensing board website. Every state has different requirements, and some don’t require specific restoration licensing, but if your state requires a license, the company must have one. Verify IICRC certification through the IICRC’s online directory. Both the firm and individual technicians should hold relevant certifications for the type of damage you’re dealing with.

Confirm insurance coverage by requesting a Certificate of Insurance showing general liability (minimum $1 million), workers’ compensation, and commercial auto coverage. Call the insurance company listed on the certificate to verify the policy is current and active. Check the Better Business Bureau for complaints and resolution history. A few complaints aren’t unusual for a busy company, but a pattern of unresolved complaints is a disqualifying red flag.

Search for the company on your state attorney general’s consumer complaint database. After major storms, state AGs often publish lists of companies with active complaints or investigations. Verify the company has a physical business address, not just a P.O. box or residential address.

What to Do If You’ve Been Scammed

If you believe a restoration company has defrauded you, take these steps immediately. Document everything: save all contracts, estimates, invoices, communications, photos, and receipts. Contact your insurance company to report the suspected fraud. If you signed an AOB, inform your insurer and ask about your options for revoking or disputing it.

File a complaint with your state’s attorney general, contractor licensing board, and the Better Business Bureau. For storm-related fraud, contact the National Insurance Crime Bureau’s tip line. Consider consulting a consumer protection attorney, especially if the amount in dispute exceeds $5,000.

If work is incomplete or substandard, hire an independent inspection company to document the deficiencies. This third-party documentation strengthens any legal claim or insurance dispute.

Frequently Asked Questions

Are all door-to-door restoration companies scams?

No. Some legitimate restoration companies do canvass storm-affected neighborhoods. The difference is in their approach. Legitimate companies introduce themselves, offer inspections, and give you time and space to make a decision. They provide verifiable credentials, written estimates, and references. Scammers use high-pressure tactics, demand immediate signatures, and resist providing documentation.

How do I know if a restoration estimate is fair?

Get at least two to three estimates for non-emergency work. For emergency mitigation, you may need to start with one company, but you can still get a second opinion on the scope. Compare estimates line by line using Xactimate codes. Ask your insurance adjuster to review the estimate. If a company’s bid is significantly higher or lower than others, ask why.

What if I already signed an AOB and now regret it?

Check your state’s consumer protection laws. Some states provide a rescission period (typically three to seven business days) during which you can cancel an AOB without penalty. Contact your insurance company immediately to inform them of the AOB and discuss your options. If the rescission period has passed, consult an attorney about your rights under state law.

Can my insurance company recommend a restoration company?

Yes, and their recommendations are often reliable. Insurance companies maintain preferred vendor networks that have been vetted for licensing, insurance, pricing, and work quality. However, you have the legal right in most states to choose your own restoration company. Preferred vendor programs are a convenience, not a requirement.

How do I report restoration fraud?

Report suspected fraud to your state attorney general’s office, your state contractor licensing board, the National Insurance Crime Bureau (1-800-TEL-NICB), the Better Business Bureau, and your insurance company’s Special Investigations Unit. Document all evidence before filing reports, including contracts, invoices, photos of work quality, and communications.