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Texas Department of Insurance
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March 4, 2021

Do you know the signs of a contracting scam?


Should you sign a waiver to let someone inspect your roof? Or a pay a large down payment to schedule repairs? The Texas Department of Insurance has tips to help recognize and avoid common contracting scams.

“We all want our homes repaired quickly, but take the time to check out a contractor,” said Doug Slape, TDI’s chief deputy commissioner. “A few quick calls can save you money and help you avoid a scam.”

Common contracting scams

The scam: A contractor asks you to sign something before giving you an estimate of repairs.
What to do: Read it 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. The contractor could fill in the blank sections 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 offer to waive a deductible or promise a rebate for it. 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 a 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:

  • Get bids in writing and use local companies when possible. The bid should include the company’s name, phone number, and address.
  • Call the Better Business Bureau and the contractor’s references.
  • Ask for the contractor’s certificate of insurance and bond certification. Call the companies listed to verify the coverage.
  • Verify a plumber’s license and check complaints with the Texas State Board of Plumbing Examiners. Other types of contractors, including electricians, may be licensed through the Texas Department of Licensing and Regulation.
  • Ask the contractor to tell you if they contact your insurance company about additional work or costs.
  • Pay with a check or credit card instead of cash. It creates a record of your payments to the contractor.

Report possible contracting scams to local law enforcement.

Visit for more tips to avoid scams, information on insurance coverage for storm damage, and what to do if you disagree with your insurance company’s decision. TDI’s Help Line is open from 8 a.m. to 5 p.m. Central time, Monday to Friday: 800-252-3439.

For more information, contact:

Last updated: 3/4/2021