Florida Insurance Commissioner David Altmaier issued a warning to residents facing damage from Tropical Storm Gordon be careful and to make sure they fully read and understand any documents they sign in Gordon’s aftermath. Altmaier has been an outspoken critic of the ongoing assignment of benefits abuse happening in the state of Florida.
Many insurers throughout Florida have been seeing an uptick in litigation due to the inflated and fraudulent claims stemming from unlicensed contractors who have homeowners sign over their insurance policy rights in exchange for needed repairs to their homes.
Florida Chief Financial Officer Jimmy Patronis also issued a warning to consumers to protect themselves against fraud and has activated the Florida Department of Financial Services Disaster Fraud Action Strike Team (DFAST) for the 2018 hurricane season.
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On Wednesday, September 5, 2018 the Florida Fourth District Court of Appeals ruled that assignment of benefits (AOB) without all insureds’ and mortgagees signatures are unenforceable. The appellate court found no problems with an insurer requiring consent from all insureds and mortgagees, which is good news at a time when AOB abuse is such a big issue in Florida.
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Thirty people were arrested in a three-day sting to “flush-out” unlicensed contractors preying on property owners in Pinellas County. The sting produced at least 60 felony and misdemeanor charges against the violators. Operation Flush Out is Sheriff Bob Gualtieri’s third sting since October 2017.
A Tampa Bay Times’ investigation in 2017 revealed how the Pinellas County Construction Licensing Board preferred to punish unlicensed contractors with fines rather than pursue violations in criminal court. Contracting without a license carries a misdemeanor for first-time offenses and a felony the second time.
Pinellas County government took control of the agency on July 1st. Gualtieri launched the Construction Licensing Investigative Unit and trained deputies to investigate contracting crimes. The department’s previous stings in October and February netted more than 45 arrests and dozens of charges.
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The Florida insurance industry is hoping to put an end to its AOB crisis with education. Barry Gilway, president, CEO and executive director of Citizens Property Insurance Corp. says the key to slowing Assignment of Benefits (AOB) abuse in Florida is for the insurance industry to link AOB to its impact on the consumer and the premiums they are paying.
Insurance carriers from across the state have seen an increase in litigation due to AOB lawsuits from homeowners who work with unlicensed contractors who file inflated and fake claims on their behalf. According to the Florida Department of Financial Services, AOB lawsuits in Florida have increased from 405 to 28,200 between 2006 and 2016 with South Florida being the worst region for this issue.
Florida insurance industry leaders are hoping for a legislative fix with the new Senate leadership coming in next year.
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Corrupt public adjuster Jorge Fausto Espinosa recruited dozens of homeowners via his firm, Nationwide Adjusters, in an insurance fraud plot where he inflated insurance claims to the tune of $14 million.
Espinosa paid marketers to lure homeowners with free kitchens and remodeling jobs if they allowed him to manufacture damage to their homes. He earned around 30% of the insurance payouts he lined up for the homeowners. Espinosa earned payouts of more than $317,000 at times.
Insurers were pushed to pay overblown insurance payouts from claims resulting from rigged fires to water damaged. Espinosa hit at least 14 insurers with more than 50 inflated claims. He was sentenced to 20 years in state prison for racketeering and insurance fraud among many other charges.
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According to investigators, Roderick Clark of Indian Harbour Beach is facing charges after filing a false claim for more than $30,000 in hurricane damages last year.
Clark claimed his home had sustained electrical damage during Hurricane Irma including having to replace 11 outlets and electronic devices that did not belong to him. According to court records, Clark also submitted a forged letter from an electrical company to USAA Insurance Co. stating that they made repairs in the about of $31,350.67.
Clark was arrested and charged with grand theft and insurance fraud.
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Florida Chief Financial Officer Jimmy Patronis reminds Florida homeowners that the 2018 Hurricane Season is in full swing and the importance of reviewing their insurance policies to understand the type of coverage it provides.
According to CFO Jimmy Patronis, “Last year, Hurricane Irma alone resulted in more than $8 billion in insured losses. If you haven’t already, now is the time to financially prepare for the 2018 Hurricane Season.” He advises that a vital part of hurricane preparedness is making sure that you understand what is and is not covered under your homeowner’s insurance policy so that you can have adequate coverage.
There are eight insurance coverages homeowners may want to consider for hurricane season:
- Windstorm Coverage
- Flood Insurance
- Food Spoilage
- Sinkhole Coverage
- Additional Living Expenses/Loss of Use
- Inflation Guard Endorsement
- Replacement Cost Endorsement
- Law and Ordinance
Once a storm develops, insurance companies may be under binding restrictions and may be unable to obtain a separate policy or add these essential coverages to the current policy. It is imperative that homeowners speak to their insurer to confirm these coverages as soon as possible.
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Since Hurricane Season is underway, here’s a Daily Business Review article published by Roig Lawyers Partner Patricia Preciado that still holds true today.
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Aerial image of Florida Keys after Hurricane Irma
Filed under AOB, Assignment of Benefits, Claims Handling, Florida, Hurricane Andrew, Hurricane Irma, Hurricane Matthew, Insurance, Insurance Claims, Insurance Defense, Insurance Fraud, Lawsuits, Property Insurance
Recently, there has been an uptick in changes to the language in the assignment of benefit contracts which emergency mitigation companies are having Insureds sign.
One of the changes in the contracts is that the Insured’s execution of the assignment of benefits authorizes the carrier to not only directly pay them for their services, but to also include them on all checks regardless of the coverage they are for. For example, if the carrier pays the insured under Coverage A for repair, Coverage C for contents, or Coverage D for additional living expenses, this contractual language may require that the AOB company be listed on these checks.
A second change in the contracts is that the assignment of benefits may have a single sentence seeking to exceed any emergency services cap the carrier’s policy may have. Once the carrier receives this contract, the clock begins ticking on the time frame for the carrier to respond. If the carrier fails to respond within the timeframe detailed in the policy, this cap is waived.
With an influx of insurance claims due to recent natural disasters, being aware of these changes is key to how you handle these claims. Hopefully, this overreaching on behalf of the AOB companies will be the final push needed to have some laws passed to regulate this AOB realm.
If you have any questions on this issue, please feel free to contact our First Party Property Team at email@example.com.
ROIG Lawyers attorneys have provided presentations on Assignment of Benefits as well as other areas that are beneficial to our clients in the Property Insurance industry. For more information on how to schedule a complimentary Continuing Education course via webinar or live presentation, please contact the Marketing Department of ROIG Lawyers.
Our thoughts continue to be with all those affected by Hurricane Irma. We recognize many of you will face challenges in the days and weeks ahead. In staying true to our values of loyalty and teamwork, we want to let you know that ROIG Lawyers is here to help.
With the upcoming influx of property and insurance claims to be filed, top-of-mind awareness among claim handling professionals is key in identifying fraudulent and inflated hurricane claims.
We have a close-knit group of statewide First Party Property attorneys dedicated to providing quality and proactive legal services to our clients in the area of property defense. We utilize a proactive approach in which we litigate to property claims and moreover, if the need arises, we have experienced trial attorneys on our team ready to take files through trial.
We are also available to provide complimentary in-house CE courses to our clients and colleagues as a value-added service. We do this to ensure that our clients and prospective clients are making informed decisions based on the most up to date and relevant information. These are a few of the courses that may be of most interest to you and your team.
- Public Adjusters and SIU, 2 credit hours
This course will inform and update insurance adjusters on the role of a public adjuster when investigating a homeowner’s claim. The course will educate adjusters on the statutory authority for public adjusters as well as ethical requirements. Adjusters will be educated on common tactics and provided with examples of ways adjusters can assist with a fraudulent claim. Finally, adjusters will be educated on the potential pitfalls associated with alleging insurance fraud.
- Water Mitigation Claims, 1 or 2 credit hours
This course will provide a basic overview of the various requirements of water mitigation services pursuant to the Institute of Inspection Cleaning and Restoration Certification (“IICRC”). Specifically, the course addresses the types of machines used, the categories and classes of losses, and various SIU issues to be aware of when adjusting these types of losses.
- Examinations Under Oath and the Law, 2 credit hours
This course will inform insurance adjusters about examinations under oath and how and why they are used in practice. Additionally, the course indicates the information insurance adjusters should gather in anticipation of an Examination Under Oath.
If you have any questions, concerns, or to schedule a complimentary CE course, please contact the Marketing Department of ROIG Lawyers at firstname.lastname@example.org.
ROIG Lawyers will continue to stand with you and as always, we thank you for standing by us.
ROIG Lawyers is a minority-owned litigation firm with a primary focus on Insurance Defense Litigation. We serve as primary counsel for numerous national and regional carriers and corporations related to all aspects of insurance litigation from seven offices throughout the state of Florida. ROIG Lawyers does not intend to create an attorney-client relationship by offering this information, and anyone’s review of the information shall not be deemed to create such a relationship. E-mail list/s from ROIG Lawyers are intended to provide information of general interest to the public and are not intended to offer legal advice about specific situations or problems. You should consult a lawyer with regard to specific legal issues that require attention.