March 10, 2025
With Betty Ng — Director, Ontario & Investigation Coordination Support Services, Équité Association
It’s Fraud Prevention Month—a time to raise awareness about fraud risks and promote best practices for safeguarding personal and financial information. Betty Ng, Director of Ontario & Investigation Coordination Support Services at Équité Association, a not-for-profit working to eradicate insurance crime on behalf of the Canadian property and casualty insurance industry, shares her insights on contractor fraud and how brokers can help combat it.
What’s CAT fraud and how does it exploit vulnerabilities in the system?
When a catastrophic weather event (CAT) hits, fraudsters posing as contractors are ready to take advantage of vulnerable policyholders. Targeting those with the most severe property damage, bad actors see these highest claims as an opportunity for a quick payday. From financial loss to physical and emotional harm, contractor fraud can leave policyholders in a worse situation than when disaster first hit.
Contractor fraud takes many forms, but a common scheme involves purposefully working to max out policy limits without providing adequate services. Fraudsters rely on panic, stress and urgency to pressure policyholders into signing contracts without fully understanding the scope of the commitment. This is where brokers can step in, offering clarity and guidance in a time of crisis.
What role do brokers play in fraud prevention?
Brokers act as protectors of honest, hardworking policyholders during CAT events, providing crucial support and expert knowledge on policy details and coverage limits. As we move into flood season, now is the perfect time for brokers to raise awareness about contractor fraud, educate their clients on recognizing potential scams and recommend trusted providers.
How can brokers help their clients protect themselves during CAT events?
Raising awareness is the first step in protecting policyholders from becoming victims of fraud. Brokers can equip their clients with the tools to recognize and avoid fraudulent contractors. Prevention is the best offense when it comes to protecting property—encouraging policyholders to understand their property’s water or fire risk and providing steps to mitigate that risk is a great place to start.
What are the most effective strategies for preventing contractor fraud?
Following a CAT event, brokers can help their clients protect themselves by encouraging these best practices.
- Refer to a list of trusted companies provided by their insurer
- Ask for contractor references
- Check with the Better Business Bureau
- Avoid signing documents without fully understanding the commitment
- Review all charges carefully
- Verify the identity of anyone claiming to be from the insurance company by contacting their insurance adjuster directly
For brokers, supporting clients through CAT events goes beyond processing claims—it’s about advocacy, education and ensuring they’re protected from those who seek to exploit them. With the right guidance and resources, brokers can help clients recover from disasters safely and securely. And by expanding awareness of insurance crimes, Équité and their members are actively protecting policyholders and the communities they live in.