Why the Holidays Increase Insurance Fraud Risk

When severe weather collides with year-end pressures and a surge in claims, the holiday season creates a perfect environment for insurance fraud to slip through the cracks.

For claims adjusters, understanding why fraud risk rises during the winter and holiday season, which patterns tend to repeat, and what warning signs to watch for is critical to protecting both legitimate policyholders and the integrity of the claims process.

Why Winter Storms Create Opportunity for Insurance Fraud

Winter storms consistently generate some of the most disruptive and costly insured losses in the US, and those losses create opportunity. In recent years alone, winter storms produced nearly $6 billion in insured losses in 2022 and about $3.4 billion in 2023, placing enormous strain on claims operations during an already demanding season.

Additionally, over the past decade, winter weather has accounted for roughly 6–7% of all U.S. insured catastrophe losses, making it a recurring and predictable pressure point for insurers.

Example:

Winter Storm Elliott, which impacted 42 states, resulted in approximately $5.4 billion in insured losses. This storm triggered a surge of property, auto, and business interruption claims in a compressed time frame.

These conditions increase exposure to disaster-related fraud. It’s not always organized or sophisticated, often it’s a matter of loss details being adjusted, timelines blurred, or damage attributed to a storm that didn’t cause it.

Winter storms don’t create fraud on their own, but they create an environment where misrepresentation is easier to attempt and harder to detect, especially when systems are strained and everyone is under pressure to move fast.

Why Year-End Pressure Makes Insurance Fraud More Likely

The holiday season adds a unique layer of pressure to the claims environment. Travel, year-end financial strain, and reduced staffing levels mean both policyholders and insurers are operating under stress, and stress has a way of influencing decision-making.

Industry groups like the National Insurance Crime Bureau (NICB) consistently warn that fraud risk spikes during holiday and extreme weather periods. Their outreach campaigns emphasize that:

• Policyholders may rush to file claims before year-end
• Financial strain can increase temptation to exaggerate losses
• Disruptions make it harder to verify timing, cause, and extent of damage
• Dishonest contractors often target homeowners eager to complete repairs quickly

Disruptions caused by travel, weather, and staffing challenges can make it harder to immediately verify the timing, cause, and extent of damage. That gap creates opportunity, not just for policyholders acting under financial pressure, but also for dishonest contractors who target homeowners eager to restore heat, power, or safe living conditions as quickly as possible after winter storms.

Winter storms don’t cause insurance fraud. But when they collide with year-end stress and urgency, they create conditions where fraud is more likely to occur and more difficult to detect.

Contract Repair Fraud After Winter Storms

Beyond the initial claim, winter storms often open the door to post-loss repair and contractor fraud. When homes lose heat, water, or structural safety in freezing conditions, homeowners are under pressure to act fast. That urgency creates opportunity for dishonest contractors to step in.

The NICB regularly issues warnings after major weather events about:

• Contractors requesting large upfront payments
• Inflated or unnecessary repair estimates
• Work that is never completed or poorly performed
• Misrepresentation of damage severity to increase payouts

In many cases, these schemes begin with contractors who appear immediately after a storm, offering quick repairs or claiming they are already working in the area. Homeowners may be asked to pay large upfront deposits before work begins, often with promises that insurance will cover the cost. Once payment is made, the work may be delayed, poorly performed, or never completed at all.

Other schemes involve inflated or unnecessary repair estimates, where damage is overstated to increase insurance payouts. In some situations, contractors misrepresent the severity or cause of damage, attributing pre-existing issues to a recent storm, to justify higher repair costs. These practices not only expose insurers to inflated claims but can also leave policyholders with substandard repairs and limited recourse.

Contractor-related fraud thrives in winter because policyholders are often focused on restoring basic living conditions as quickly as possible. When time feels critical, normal verification steps may be skipped, documentation may be thin, and pressure builds to move claims forward, exactly the conditions where fraud is easiest to introduce and hardest to unwind.

Want to stay one step ahead of fraudsters this holiday season? Talk to us today.

Check out our sources:

Hagerty, Jaclyn. “Winter Weather Losses on the Rise.” Insurance Business America, 3 Mar. 2025, https://www.insurancebusinessmag.com/us/news/catastrophe/winter-weather-losses-on-the-rise-27812.aspx.

Insurance Information Institute. “Facts + Statistics: Winter Storms.” III, 2025, https://www.iii.org/fact-statistic/facts-statistics-winter-storms.

National Insurance Crime Bureau. “Dishonest Contractors Targeting Homeowners after Recent Catastrophic Weather.” NICB, 2025, https://www.nicb.org/news/news-releases/dishonest-contractors-targeting-homeowners-after-recent-catastrophic-weather.

Western New York Hospital Association. “Winter-Driving Hazards: Winter-Weather-Related Fraud Cases.” Help Stop Fraud, 2025, https://helpstopfraud.org/winter-driving-hazards/winter-weather-related-fraud-cases/.