Insurance fraud in South Florida – We’re all affected by it!
Beware of the guy knocking on your door claiming he can get you a new roof, new kitchen and/or a new bathroom.
I could tell you about the homeowner who had a small leak in an above ground pipe in his garage which he temporarily repaired. He subsequently allowed one such company who knocked on his door to file a claim on his behalf and you can imagine his shock when he found out they made a claim for damages totaling over $80,000.00! To add salt to the wound, now he can’t get home insurance.
Beware of the water restoration company asking you to sign documents (known as Assignment of Benefits or AOB) for them to take care of your water damage claim. You may be signing all your rights over to them and you’d be amazed at some of the stories and the things they do in your name, whether you agree to it or like it or not – and which at that point you can do nothing about.
– Opening bank accounts in your name. Making claims for things that are not damaged in your name or intentionally causing damage in order to make a claim in your name. And even filing lawsuits against your insurance company in your name, whether you want them to or not.
This affects you and me whether we’re personally involved in these cases or not.
South Florida insurance companies pay out over $1.50 – $2.75 in claims for every $1.00 they collect. You don’t have to be a mathematician to know, that math will not work for very long.
Even though we haven’t had any hurricanes hit South Florida for over 11 years, companies have paid out hundreds of millions of dollars in water damage claims here.
Recently I was attending an insurance class given by Citizens Property Insurance and they stated that if they were allowed to charge the correct premium based on what’s happening in the market, their $4000.00 premium would become $9,000.00 <—- that’s not a typo. Their premiums would more than double. There is a law in effect that caps Citizens increases to 10% per year so their premiums will not double overnight, but unless something changes quickly, we will see that 10% increase every year for a very long time. It won’t be long before their premiums will more than double. And what about all the other companies that don’t have a cap on increases?
What will happen when the real storm hits! Where will the money come from? Will the companies be able to weather the storm? Will Citizens’ policyholders have to pay the hefty 45% surcharge built-in to their policies.
Here are a few examples of how this is affecting us:
- Homeowners Insurance premiums are rising.
- In some cases water damage coverage is being excluded on Homeowners Insurance for properties 40 years old and older. Some carriers are offering this as an option for newer homes as well.
- There is a significant rise in the number of policies being non-renewed for claims and other reasons and in many cases homeowners cannot obtain replacement coverage.
- Companies have recently stopped writing Homeowners Insurance in South Florida and others have continued their previous moratorium for Homeowners Insurance in South Florida.
- Restrictions and additional responsibilities have been placed on the home insurance policy and policyholder for the If and when they have a water damage claim.
- Some companies have recently merged and others are pursuing buyers because they lack the capital to stay in business.
Be aware of what’s happening so you will know how to deal with it and you can help spread the word.
There are good public adjusters, restoration companies and attorneys out there. But there are some bad ones too.
If you choose to hire one, don’t go into it blindly. Patiently interview and choose them carefully. Let them know that you’re not interested in making stuff up. Report them if they do. Stay on top of the process from start to finish.
We recommend giving the insurance company the chance to make things right FIRST. And if things don’t work out well, then consider your options, one of which is hiring one of these third parties to represent you.
99% of the time things work out well when going directly through the insurance company.
These third parties make a living this way and they play up on a few bad experiences to make it look like it’s the norm. They want people to think that it’s difficult to get their fair share unless they hire them, and in most cases that’s not true!
I’ve been in the insurance business for over 34 years; long enough to know that most insurance carriers do the right thing. They make things right for you in your time of loss. Therefore we encourage our customers to give them the chance to make it right first…
This Assignment of Benefits has created such a crisis in the Homeowners Insurance market that I encourage you to reach out to your representatives in the legislature and ask them to bring resolution to this matter by passing laws in the upcoming session that will close some of these loop holes and stop this massive fraud. Remind them that it’s ultimately coming out of our pocket books!
And remember, If and when you have a claim or questions about one, call us, we’re right there with you to help guide you through the process.