Storms pass. Repairs begin. Scammers show up. After a major event, neighborhoods get flooded with offers that sound helpful but carry risk. This guide comes from a restoration owner who has worked storm seasons for years. I want your recovery to move quickly without losing money or control. You will learn how to spot classic post disaster contractor scams, how to run contractor license verification that actually protects you, how to write a scope that prevents surprises, how to set up phased payments with lien waivers, and where to report fraud. Every tip follows plain steps that match federal consumer guidance from FEMA and the FTC, with extra context from the CFPB, NICB, and Levelset.
Quick homeowner checklist
Use this short list before you sign or pay anyone. FEMA and the FTC both say to stick with verified credentials, written agreements, and safe payment methods.
- Ask for photo ID, license number, and a current certificate of insurance. Then verify each item with the state board and the insurer.
- Request two or three written estimates with itemized scopes. Compare materials and timelines in writing.
- Avoid large up front cash payments. Pay by check or credit card in stages tied to work milestones.
- Use conditional lien waivers for progress payments. Sign an unconditional waiver only after funds fully clear your account. See the Levelset lien waiver guide for definitions.
- Keep photos, receipts, and every message in writing. Store copies in cloud storage or email threads.
Red flags after a disaster
Scam activity rises right after a flood or fire. The FTC warns about pressure tactics and payment tricks that look small but lead to large losses. Strangers may knock on your door, promise priority scheduling, then ask for a quick decision. Slow the conversation. Ask for identification. Write down names and business info. A real contractor will give you time to verify.
Low bids that look too good often point to cut materials or short staffing. Compare the scope, not just the price. Watch for quotes that skip permits or inspections. That shortcut can void coverage or stall resale. The FTC also calls out specific payment ploys. Gift cards, wire transfers, or peer to peer apps offer no recourse. Use a check or credit card tied to a written contract. Protect your right to dispute charges if work stops.
Another red flag involves license claims without proof. Ask to see an actual license card and a certificate of insurance. Write down the license number, legal company name, and the insurer’s phone number. Then run contractor license verification with the state board. Call the insurer to confirm active coverage. No excuses. FEMA says this step should happen before hiring anyone.
Do not sign over your insurance check to a contractor you just met. The National Insurance Crime Bureau notes a rising problem with assignments of benefits that remove the policyholder’s voice. A contractor may request an AOB to handle payment, then steer the claim. That can lock you out of decisions and may expand cost beyond the scope. Avoid signing any AOB or direction of pay without talking to your insurer or an attorney. See NICB disaster tips for a quick overview.
Look for local references. Call them. Ask about punctuality, billing fairness, and how punch lists were handled. Ask if the project passed final inspection on time. Ask what happened when materials were back ordered. You want proof of steady project management, not just sales staff.
Finally, reject any claim that a contractor works for FEMA or a government program. FEMA does not endorse contractors. A badge or vest with logos does not change that. Report anyone who makes that claim to local police and your state Attorney General.
Verify licenses and insurance
Take ten minutes to lock down identity and coverage before you commit. The goal is to filter out risky actors while building a file your insurer trusts. FEMA and the CFPB both push this step for consumer protection.
How to run contractor license verification
Ask for the full legal business name, license number, and the name on the insurance certificate. Ask for a government issued photo ID for the person you are meeting. Look for a match across all documents. Then search your state licensing board’s online lookup. Many states cover general contractors, plumbers, electricians, and HVAC under separate boards. If the board lists complaints or suspensions, read the details. Status should read active with no unresolved discipline. If the work is specialty work such as well service or septic, confirm the specific trade license as well.
Call the phone number printed on the certificate of insurance. Do not rely on a number typed into the proposal. Ask the agent to confirm active policy dates, coverage limits, and whether workers compensation is in place. Ask for the certificate to list you as a certificate holder at your property address. That gives you notice if coverage changes during the job. The FEMA fraud fact sheet underlines this exact step.
Confirm permit responsibility. Ask the contractor to identify which permits apply for the work. A licensed pro will offer to pull permits under their license. Refusal to pull permits points to licensing gaps or rushed work.
What state lookups reveal
A state lookup can show business names, DBA records, license classes, expiration dates, and disciplinary actions. Some include bond information or proof of continuing education. Read the name carefully. If the license shows a different legal entity than the person who bid the job, pause. Ask why the names differ. You want signatures from the licensed entity that will do the work, not a shell name.
For readers in Texas, major trades such as electrical and HVAC fall under the Texas Department of Licensing and Regulation. Plumbers hold a separate license through the Texas State Board of Plumbing Examiners. Contractors may also register with local municipalities for permits. Use the state lookups before you sign. Then double check local permits with your city building department.
Written scope, contracts, permits
A strong written scope stops scope creep, billing surprises, and finger pointing. The FTC advises consumers to get every promise in writing. No blanks. No verbal side deals. No signatures on forms with missing pages.
Ask for an itemized scope that lists materials, brands or equivalents, locations, and quantities. If you need drywall replacement, the scope should list thickness, type such as mold resistant, square footage, and the room list. If your roof is involved, the scope should name shingle type, underlayment, vents, and flashing. If flooring is part of the claim, request a brand and SKU or a quality allowance with pricing per square foot. Ask for a written schedule with estimated start date and completion window. Ask for work hours and site access rules.
Permitting must sit inside the contract. Identify who pulls permits, who pays for them, and who schedules inspections. The contract should state that all work will meet local code and pass inspection. Include cleanup and disposal. A good contractor will list dumpster size, haul off frequency, and final jobsite cleaning. List dust controls for interior work. Negative air, zipper doors, and HEPA filtration protect contents in living areas.
Change orders decide how surprises get handled. Require written change orders for any new scope with price and time impact before the work changes. No scribbles on the back of a business card. Ask for a document with a signature line for both parties. Keep each change order in your project folder.
Spell out warranty terms. Material warranties depend on the manufacturer. Workmanship warranties come from the contractor. Ask for the duration in writing. Ask how warranty claims get handled if the business merges or changes ownership.
Payments and lien waivers
Payment structure matters as much as price. You want cash flow that rewards real progress. You also want paperwork that prevents liens from unpaid subs or suppliers. The FTC warns against large up front payments that are hard to recover. A better plan uses small deposits, milestone payments, and a final payment after you pass final inspection.
Safe payment plan example
Deposits exist to reserve materials and scheduling. Keep that deposit small. Many homeowners choose a deposit in the ten to thirty percent range for larger projects, with the balance tied to milestones. Payments should follow visible work. Use a simple plan like the example below. Adjust based on scope size or special order materials.
| Milestone | Payment |
|---|---|
| Contract signed, permit submitted | Small deposit |
| Demo complete, debris removed | Progress payment with conditional lien waiver |
| Rough in complete, rough inspection passed | Progress payment with conditional lien waiver |
| Final inspection passed, punch list complete | Final payment with unconditional final lien waiver |
Pay by check or credit card tied to your contract. Avoid cash, gift cards, wire transfers, or peer to peer apps. The FTC guidance flags those methods as common in fraud patterns.
How lien waivers protect you
A lien waiver is a receipt that waives the right to file a mechanic’s lien for work covered by a payment. Two main types exist. A conditional waiver takes effect only when payment actually clears the bank. An unconditional waiver takes effect immediately upon signature. Use conditional waivers for each progress payment. Ask for unconditional waivers only after your bank confirms that funds have cleared. The Levelset guide to lien waivers offers a plain language summary worth saving. Keep waivers from the general contractor and any subcontractors or suppliers named on invoices. That step lowers lien risk if a middle tier party fails to pay a supplier.
Assignment of benefits caution
Some contractors ask for an assignment of benefits or a direction of pay. This can transfer your claim rights to the contractor. It can also reduce your control over scope, material choices, or dispute options. The NICB advises homeowners to avoid signing any AOB without talking to your insurer or legal counsel. Ask the contractor to work under a standard contract with you as the payor. Keep control of payments. Keep control of communication with your adjuster.
Documentation and insurers
Good files move claims faster. Start each project with a folder in your email and a mirror folder in cloud storage. Take wide photos of each room before work starts. Add closeups of structural damage, water lines, soot staining, and warped materials. Date stamp files if possible. After demo, repeat the photo set. Do the same at rough in, pre paint, and final. This builds a time line that helps adjusters and code officials. It also helps you push back if work misses the mark.
Save every estimate, invoice, lien waiver, and permit receipt as a PDF. Save text messages by exporting transcripts. Use email for approvals rather than phone calls. Simple one line confirmations save money. For example, reply with Approved for item X at price Y. That message becomes part of your contract record.
Stay on the same page with your insurer. The NICB urges policyholders to coordinate with their carrier rather than letting a contractor control the claim. Share your written scope with the adjuster. Ask how the scope lines up with coverage. Ask about depreciation and how recoverable depreciation pays out. Ask whether materials must match like kind quality or can shift to a better grade. Keep your insurer informed about completion dates and inspections.
When to report and get help
If a contractor pressures you to pay with a gift card, sign blank documents, or skip permits, step back. Tell them you need to verify their license and insurance. If the pressure continues, end the visit. Report the contact if it feels like a scam. FEMA’s fraud page lists contacts for rapid reporting.
Report fraud or attempted fraud through these channels.
- Local police department for immediate threats or criminal activity.
- Your State Attorney General consumer protection office.
- FEMA guidance on contractor fraud: FEMA fraud fact sheet.
- Federal Trade Commission: ReportFraud.ftc.gov for scams and unfair business practices.
- National Center for Disaster Fraud hotline at 866 720 5721 or email disaster@leo.gov.
- Better Business Bureau for complaint filing and public records on businesses.
If money already changed hands, call your bank or credit card company right away. Ask to dispute the charge or stop payment. Then file reports with the FTC and your state AG. Keep copies of every message and receipt for investigators.
Local help and resources
If you need a trusted partner during recovery, our team can help with mitigation, rebuild, and claim support steps. Start with our water damage restoration (Policyholder Rights Sheet) page. Download the rights sheet to understand what your policy covers and how to work with your adjuster. You can also use the contact form there to request a site visit.
Floods can contaminate private wells through surface infiltration. Hire a licensed well professional rather than an unvetted door to door offer. To learn what testing and disinfection involve, read our guide on how to test and disinfect private wells. For a wider overview of sampling and septic safety, review well water testing after floods. These resources explain when to shut down a well, how to shock chlorinate, and when lab testing is required before use.
Content losses need a distinct plan as well. Our content restoration team inventories items, packs them out, and cleans them using cataloged methods. We document pre loss condition, triage items that are salvageable, and provide reports for your adjuster.
Many homeowners also want to reduce waste during rebuilds. If that is a goal for your project, our eco friendly recovery practices article lists material choices and debris diversion tactics that cut landfill trips while meeting code.
Texas notes for homeowners
Licensing in Texas depends on the trade. Electricians and HVAC contractors are licensed through TDLR. Plumbers are licensed through the TSPE. Roofers may not need a state license, yet many cities require registration for permits. Always check your city or county for permit rules. Ask your contractor to show city registration where required.
Lien law in Texas has strict timelines for notices. The type of waiver form also matters. The same best practice still applies. Use conditional waivers for progress payments. Use unconditional waivers only after funds clear. For a refresher on waiver types and timing, the Levelset lien waiver guide provides a clear breakdown. Speak with a Texas construction attorney for project specific questions.
Sample scripts you can use
Use these lines during the first meeting. Short, clear requests save time and protect your position.
Please provide your license number, a photo ID, proof of general liability and workers compensation, and three local references. I will verify credentials and I will sign only after I receive a written scope and contract.
I am not signing anything today. I need time to compare bids and verify licenses. Please leave a written estimate with your license number and insurance details.
We can proceed with a small deposit and milestone payments tied to inspections. I will require conditional lien waivers for progress payments and an unconditional final waiver after funds clear.
When to hire pros vs DIY
Minor cleanup may be doable with help from neighbors. Large losses need trained techs, proper PPE, and drying equipment sized for the space. Hidden moisture behind walls turns into mold growth within days. Structural safety and electrical safety should be checked before you re occupy. If you suspect significant water intrusion, call a licensed firm for moisture mapping and controlled demo. Our water damage restoration (Policyholder Rights Sheet) page explains how professional drying plans work and what your policy may cover.
Water that touched flood water can carry sewage or chemicals. Food contact items and porous materials often need disposal. Private well owners should pause use until testing clears the supply. Use the guidance linked above on well testing and disinfection for safe reopening of a well.
FAQ
How do I verify a contractor license
Ask for the license number and the legal business name. Look up the number on your state licensing board website or call the board directly. FEMA recommends this step before hiring anyone. You can start with the FEMA contractor fraud tips and then use your state directory.
Can I be liable if a worker gets hurt at my home
Yes in some cases. If a contractor lacks workers compensation or has lapsed coverage, you could face exposure. Ask for proof of general liability and workers compensation before work starts. Confirm with the insurer by phone. The FTC highlights this risk in its post disaster advice.
What is a lien waiver in simple terms
A lien waiver is a receipt that trades lien rights for payment. Conditional waivers wait for funds to clear. Unconditional waivers take effect at signature. Use conditional waivers for progress payments. Ask for an unconditional final only after your bank shows cleared funds. See the Levelset guide for definitions and examples.
Should I sign an assignment of benefits
Only after you speak with your insurer or an attorney. An AOB shifts claim control to the contractor. That may speed billing, yet it can also limit your input. The NICB cautions consumers about AOB risks after disasters.
What if a contractor wants a huge deposit
Treat that as a red flag. Set up milestone payments that follow completed work. Pay with a check or credit card. Avoid gift cards or wire transfers. The FTC suggests staged payments to reduce risk.
How many bids should I get
Two or three written estimates work well. Enough to compare price and scope without delaying work that protects the home. Compare line items for materials, labor hours, permit fees, and cleanup. Ask questions until the scopes match one another in detail.
What should the contract include
Itemized scope, material specs, brand or allowance, timeline, permit responsibility, cleanup, payment schedule, lien waiver process, warranty terms, and change order rules. No blanks. No missing pages. Keep a signed copy in your project folder. The FTC emphasizes written terms as the foundation for safe work.
Closing thoughts
Recovery moves faster when you slow the first step. Verify licensing and insurance. Put the scope in writing. Use staged payments with lien waivers to match progress. Keep records that support your claim. If a contractor refuses these basics, move on. If you need help right now, reach out to our team through the water damage restoration (Policyholder Rights Sheet) page. We can set inspections, document loss conditions, and help you build a plan that protects your home and your wallet.