The final weeks of the year always bring a rush of home repairs and renovations. Families prepare for holiday guests, early winter storms uncover new issues, and many homeowners push to finish upgrades before January. But in late 2024 and throughout 2025, reports of contractor fraud, unfinished work, and insurance disputes have continued to rise, according to data from the FTC, BBB, and state licensing boards.
High demand, rising construction costs, and ongoing labor shortages have encouraged more homeowners to hire quickly, sometimes without checking credentials. That creates the perfect environment for scams, unsafe work, and costly insurance problems.
Table of Contents
- Why End-of-Year Repair and Renovation Demand Jumps
- How Contractor Fraud Increased in 2024–2025
- What Insurance Actually Covers, and Where Homeowners Lose Protection
- The Growing Liability Risks for Homeowners
- How to Avoid Contractor Scams and Protect Your Home
- How These Trends Affect Homeowners Financially
- Why Having the Right Insurance Advisor Matters
- Sources and Further Reading
Why End-of-Year Repairs and Renovations Spike
Home maintenance and remodeling activity consistently increase during the last quarter of the year. This trend is supported by industry data from the Joint Center for Housing Studies at Harvard and multiple contractor associations. Key reasons include:
- Holiday preparation: Homeowners rush to fix roofs, plumbing, flooring, and living spaces before guests arrive.
- Weather-related problems: Early storms reveal leaks, gutter damage, electrical issues, and foundation cracks.
- Year-end budgeting: Some households use remaining improvement funds or plan for upcoming tax-related efficiency upgrades.
- Contractor availability concerns: Many believe prices go up in January and try to book work before the new calendar year.
As demand rises, risk rises with it, especially if homeowners feel pressured to hire fast.
How Contractor Fraud Increased in 2024–2025
Contractor-related scams and complaints have been increasing across the U.S., according to the FTC, BBB ScamTracker, and state consumer protection agencies. The biggest contributors include:
- More unlicensed contractors: Labor shortages lead some individuals to present themselves as qualified pros without proper credentials.
- Deposits and disappearances: Fraudsters collect a large down payment, start demolition, and vanish before finishing the job.
- Material-cost manipulation: Scammers cite “volatile prices” to charge sudden, unjustified cost increases.
- Storm-chaser contractors: After major storms, out-of-state crews offer quick repairs but leave behind unsafe and unpermitted work.
Many homeowners discover the fraud only when the city denies a permit, their insurer rejects a claim, or safety hazards appear months later.
What Insurance Actually Covers, and Where Homeowners Lose Protection
Homeowners insurance offers important protections, but not all problems caused by contractors are covered. In some cases, hiring the wrong contractor can even jeopardize your coverage.
Homeowners insurance may cover:
- Sudden accidental damage during a permitted project (such as a burst pipe).
- Fire, soot, or water damage resulting from contractor negligence.
- Weather-related repairs completed by licensed professionals.
Homeowners insurance usually does NOT cover:
- Work performed by unlicensed or uninsured contractors.
- Defective workmanship or incomplete projects.
- Damage caused by unpermitted renovations.
- Cost overruns, change orders, or workmanship disputes.
Even when the homeowners policy pays for accidental damage, claims are far easier to process when the contractor carries proper liability insurance. If they do not, the homeowner often ends up financially responsible for fixing the unsafe work.
The Growing Liability Risks for Homeowners
Liability risks increase significantly during end-of-year projects, especially when multiple workers are on the property. Common risks include:
- Injuries on your property: If an uninsured contractor or misclassified worker is hurt, the homeowner may face legal or financial claims.
- Damage to neighbors’ homes: Electrical, roofing, or plumbing mistakes can cause damage beyond your property line.
- Fire hazards: Holiday electrical loads, space heaters, and temporary wiring elevate fire risk.
- Permit violations: Skipped permits can result in fines, forced demolition, or denied insurance claims.
These incidents have become more common as unlicensed contractors use social media and neighborhood apps to advertise without proper oversight.
How to Avoid Contractor Scams and Protect Your Home
Homeowners can dramatically reduce risk with a few key precautions:
- Verify licensing: Use your state contractor board’s website to confirm the license status.
- Confirm insurance: Request a Certificate of Insurance (COI) sent directly from the insurer—not handed to you on paper.
- Use written contracts: Include scope of work, payment schedule, timeline, and warranties.
- Limit deposits: Many states limit upfront payments. In California, the legal cap is $1,000 or 10%, whichever is less.
- Ensure permits are filed: Roofing, electrical, structural, and major plumbing work almost always require permits.
- Notify your insurer: Some renovations affect coverage, so keeping your insurer informed helps avoid gaps.
The biggest mistake homeowners make is rushing. Taking even a few extra steps before hiring can prevent thousands in losses.
How These Risks Affect Homeowners Financially
Choosing the wrong contractor can have long-term financial consequences, including:
- Out-of-pocket repair expenses: Fixing unsafe or incomplete work often costs more than the original project.
- Higher future premiums: Claims related to contractor-caused damage can lead to price increases.
- Legal and dispute costs: Lawsuits involving injuries, property damage, or fraud can be expensive and slow.
- Lower property value: Unpermitted or non-compliant work can delay or block home sales.
With construction costs still high entering 2026, even small errors can become expensive setbacks. Homeowners who understand coverage gaps and vet contractors carefully are far better protected.
Need Help Reviewing Your Home Insurance Before a Major Repair?
End-of-year renovations don’t have to be stressful. Inszone Insurance Services can help you review your homeowners policy, identify gaps, and make sure you’re fully protected before the work begins. Our team works with homeowners nationwide and understands the coverage details that matter most during renovation season.
Learn more about homeowners insurance and connect with an Inszone expert.
Sources and Further Reading
- Federal Trade Commission (FTC) – Home Repair Scams
- Better Business Bureau – Contractor Scam Reports
- California Contractors State License Board (CSLB) – License Lookup & Fraud Alerts
- Joint Center for Housing Studies of Harvard University – Remodeling Trends
- Insurance Information Institute (III) – Homeowners Insurance Basics
- U.S. Department of Housing and Urban Development – Renovation & Safety Requirements
- National Association of Home Builders – Labor Market Trends
Juan Cruz
