5 Tips to Protect Yourself From Home Repair Scams

Last year, the Federal Trade Commission received 81,925 reports of home improvement scams. Per the Better Business Bureau, each scam costs homeowners an average of $1,800. From Hippo Home Insurance, here are five tips to protect homeowners from falling victim to home repair scams. 

1. Know the Scams 

Three common types of home repair scams are: 

• Solicitation after extreme weather events, where scammers pressure vulnerable homeowners into immediate repairs, resulting in low-quality or unfinished work. 
• Garage door scams, where contractors claim a sudden need for repair or replacement, pressuring homeowners into expensive and unnecessary services. 
• Offering free solar panels. Scammers lure homeowners with promises of no-cost installations that come with hidden fees, predatory loan agreements or inflated long-term contracts. 

2. Scope Out the Red Flags 

Scammers posing as home repair contractors typically show red flags that can be easy to spot when you know what to look for. Homeowners should be on the lookout for these warning signs: 

• No local business address or phone number 
• Requests for full payment up front 
• Refusal to provide written estimates 
• No proper licensing or insurance 
• High-pressure sales tactics 
• Significantly lower bids than competitors 

3. Ask the Important Questions 

“When facing a home repair, high-pressure sales tactics can make anyone feel rushed into a decision,” Hippo shares. “Before committing to any work, knowing the right questions to ask a contractor is essential.” 

Here are some questions to consider asking a contractor before starting a project: 

• Can you give local references from recent jobs? 
• What licenses and insurance do you have? 
• Will you give a detailed written estimate? 
• What’s your timeline for completing this project? 
• How do you handle change orders and additional costs? 
• What warranty do you offer on your work? 

When listening to their answers, be on the lookout for evasiveness, unclear answers, aggression, defensiveness and a lack of transparency. 

4. Verify the Contractor 

There are some ways to personally verify a contractor’s credentials and insurance coverage, including:  

• Checking the state licensing database or the National Conference of State Legislatures 
• Requesting a Certificate of Insurance 
• Reviewing Better Business Bureau ratings 
• Confirming business registration 

5. Go Through the Home Repair Contract Checklist 

Hippo recommends that homeowners ensure that contracts detail these key provisions before agreeing to any work: 

• Detailed scope of work 
• Materials specifications and costs 
• Timeline and payment schedule 
• Warranty information 
• Change order procedures 
• Lien waiver provisions 

What to Do If You’re Scammed 

If you suspect you’ve been scammed, here are some steps to take: 

• Document all communications and payments 
• Contact your bank or credit card company 
• Report to local law enforcement 
• File complaints with state consumer protection agencies 
• Report to the Better Business Bureau 
• Contact your insurance provider