The National Council of Insurance Legislators (NCOIL) has updated its anti-insurance fraud model law for the first time in three decades and readopted the Storm Chasers Consumer Protection model act, which sets regulatory expectations for contractors working after catastrophes.
According to a report from BestWire, both actions are intended to support state-level efforts to manage growing fraud exposure linked to severe weather events, contractor disputes and post-loss litigation.
The updated Insurance Fraud model expands the definition of fraudulent acts, addresses contractor-related schemes, closes criminal enforcement gaps and strengthens consumer protection measures.
The Coalition Against Insurance Fraud noted in its weekly briefing that the revisions give regulators and law enforcement clearer statutory language to prosecute fraud cases, which continue to rise in frequency and cost. Much of the amendment is based on a Louisiana bill intended to improve enforcement flexibility and consumer safeguards. The Louisiana Department of Insurance said adoption of the updated model demonstrates continued efforts to target fraud, which remains a concern for homeowners and commercial insureds.
Louisiana Rep. Michael Firment, who sponsored the model during NCOIL’s national meeting, said the amendment gives states a stronger tool to hold individuals accountable, particularly those who solicit work from homeowners after storms. He said the aim is to reduce scams that contribute to upward pressure on premiums.
Alongside the fraud update, NCOIL readopted the Storm Chasers Consumer Protection model act, the report said.
First designed for roofing contractors, it now applies to all contractors, it now applies to all contractors operating after a disaster. The model outlines practices related to abandoned work, fraudulent liens, solicitation rules and conflicts of interest.
Furthermore, the model restricts the post-loss assignment of benefits, a provision that has been at the center of legal and legislatives debates in several states due to concerns about inflated repair costs. The Washington state insurance regulator listed assignment of benefits reform as a priority for 2026.
Industry groups have pointed to increasingly costly natural disasters, inflation-driven repair costs and litigation activity as factors contributing to higher fraud exposure. According to BestWire, catastrophe-prone states have reported a rise in unlicensed contractors and claim disputes following severe weather seasons. Insurers continue to manage higher fraud-related loss costs, which can influence underwriting outcomes and rate filings.
The Coalition Against Insurance Fraud estimated that fraudulent activity costs Americans up to $308.6 billion annually, which it says equates to nearly $1,000 per household in added premium expense.
In September, NCOIL urged congressional support for a bill extending the Terrorism Risk Insurance Act (TRIA) through 2035. The organization has long supported the program, warning that without adequate terrorism coverage, capital markets would contract, businesses would hold back on investment, and consumers would face steep costs for insurance.
Broader adoption of the new models by state legislatures could shape enforcement approaches in future disaster seasons, affecting claims handling, contract practices and market-level fraud prevention strategies.
