Insurance fraud siphons off at least $80 billion from hardworking Americans every year, according the Coalition Against Insurance Fraud, a D.C.-based watchdog. Insurance fraud can take a variety of forms, with homeowners a perennial target. Fortunately, scammers follow trends just like everyone else, and most scams are easy enough to detect if you know what to look out for. Today we’re going to take a look at a common scam that targets vulnerable homeowners, and how you can protect yourself and your loved ones against it.

Unsolicited Contractor and Repair Offers

Fraudulent contractors have been known to exploit homeowners after a natural disaster hits, such as a hurricane or a tornado. In a typical scenario, the fraudulent contractor knocks on your door, offering to repair a damaged roof at very low cost. Still reeling from the natural disaster, the traumatized homeowner forks over a sizeable down payment. Once they get paid, the contractor usually ditches the job. If they do perform the work, the quality is shoddy or the work is incomplete.

I know what you’re thinking. I’d never fall for that! Well, you’d be surprised what you might agree to when a chunk of your roof is missing and you are desperate to get the repairs made as soon as possible. Fraudulent contractors understand this dynamic all too well, and will use this urgency to their advantage. They will often promise speedy repairs, and perhaps even a shoulder to cry on.

Regardless of circumstances, here are a few rules of thumb to always keep in mind when dealing with contractors that will help you avoid falling prey to the fraudulent ones.

Coordinate with your insurance company. Make a home insurance claim for roof damage and have your adjuster inspect the damage. If a contractor begins the repairs before your adjuster has a chance to inspect it, your claim could be denied and you could be on the hook for the entire cost of repairs. A contractor who insists on filing insurance claims on your behalf is also a red flag.

Don’t accept the first offer from an unsolicited contractor. Shop around, do your research online, and compare quotes. This will help you to determined if a contractor’s lowball offer is too good to be true.

Ask the contractor for proof of liability insurance and references.

Sign a contract for all work that is to be done, and make sure there are no blank areas on the contract. Legitimate contractors will have no problem creating an itemized contract and accepting checks, credit or debit cards as payment

Other red flags to watch out for:

• the contractor asks for more than a 10% deposit on the work to be done
• the contractor only accepts cash
• the contractor has no physical business location or permanent phone number