Restoration scams and red flags: deposits, AOBs and unlicensed work

What do state attorneys general tell homeowners after every storm?

The advice is remarkably consistent from state to state, and it is the backbone of our hire-a-pro guides. This table compares three recent attorney general releases. Our questions to ask any restoration company page turns it into a script for the first meeting.

Why is a large deposit a red flag?

A big deposit is the simplest way for a bad contractor to take money and disappear. We found no federal or Florida cap on restoration deposits, so the protection comes from how you pay. The Ohio Attorney General suggests paying in stages: about a third at the start, a third at midpoint and the rest at completion. Florida adds a deadline. A contractor who takes more than 10% of the contract price up front on residential work must apply for permits within 30 days and start work within 90 days after permits issue, unless you agreed otherwise in writing (§489.126). Breaking that rule can be a felony once the money reaches $1,000. Emergency steps such as water extraction may need to start right away, but you can authorize only that work and hold payment for the rebuild until it begins.

What paperwork should you never sign in a hurry?

Be careful with any document that moves your claim rights to the contractor. An assignment of benefits does exactly that. For Florida residential and commercial property policies issued on or after January 1, 2023, a post-loss assignment is void (§627.7152). Older Florida policies still allow AOBs with a 14-day rescission window. A company may now offer a “direction to pay” instead, which tells the insurer to pay the contractor. Read every word, and never sign a form with blank spaces, which the Florida Attorney General specifically warns against. Also watch for a contractor who promises to “handle” or “fight” your claim. In Florida, only a licensed public adjuster may adjust a claim for pay (§626.854). For questions about your policy, ask your insurer, your state insurance department or an attorney.

Can a contractor really cover your deductible?

Not legally in Florida. Under §817.234, a contractor who knowingly and with intent to defraud pays, waives or rebates all or part of an insurance deductible commits a third-degree felony. Florida §489.147 separately bars contractors from offering cash, gift cards, rebates or deductible waivers to get you to file a claim or allow a roof inspection, with fines up to $10,000 per violation. Any written ad urging a roof claim must warn, in at least 12-point type, that you owe the deductible. The deductible is your share of the loss. A percentage hurricane deductible can be large. The Insurance Information Institute’s example is $15,000 on a home insured for $300,000 with a 5% deductible. That is why the offer is tempting and why it is a warning sign.

How do you spot storm chasers and unlicensed work?

Storm chasers follow major weather and knock on doors. Our full guide to storm chaser scams covers their tactics. The short version: no local address, out-of-state plates, pressure to sign today, and an offer to talk to your insurer for you. The Florida Attorney General also warns about unsolicited offers and discounts blamed on “leftover supplies” from another job. Look up the license yourself. In Florida, contracting without a license during a state of emergency declared by the Governor is a third-degree felony (§489.127). Look up certifications too. The IICRC publishes a list of invalid firms using its logo without being registered as Certified Firms.

What are your cancellation rights?

The FTC Cooling-Off Rule lets you cancel many sales made at your home of $25 or more until midnight of the third business day after you sign. Saturday counts as a business day. The seller must give you two copies of a cancellation form and refund you within 10 days. The rule does not cover a repair visit you asked for, or a true emergency where you waive it in a handwritten statement (16 CFR 429). Florida’s home solicitation law gives a similar three-day right (§501.025). For Florida roof contracts signed within 180 days of a declared emergency, you can cancel within 10 days or by the official start date, whichever comes first (§489.147). After a hurricane, that window matters.