According to an August 25, 2015 article in the Sun Sentinel, South Florida Citizens Property Insurance Co. customers will see a rate increase in their homeowners’ insurance rates. The insurance company stated that South Florida policy holders must pay for the increase in water-loss claims in the region. Citizens pointed out that Miami-Dade, Broward, and Palm Beach counties had a “disturbing rise in water claims and litigation,” which leads many to believe that this is a result of fraudulent claims. Citizens CEO, Barry Gilway, stated that “When you take a look at Miami-Dade and you take a look at the rest of the state, there’s really no major differences in age of the home or frankly, virtually any other characteristic,” which concludes that “there is more fraud.”
According to Gilway, “Water losses are the major reason Citizens is seeking rate hikes for the upcoming year, especially in South Florida. Were it not for water loss, even South Florida policy holders would see rate reductions.” Citizens pointed out that the other counties in the state of Florida will see a rate decrease in their Citizens homeowners insurance.
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On July 16, 2015, a Spring Hill couple was accused of lying about a sinkhole to a homebuyer, according to a news article by ABC news. Glenn Jasen, 64, and Katheryn Jasen, 63, were indicted on a charge of wire fraud, which is a federal felony. If convicted, they each could face a maximum of 20 years in prison, according to U.S. Attorney A. Lee Bentley III.
According to the indictment, the Jasens found a sinkhole on their property and made a claim to Citizens Insurance. Instead of repairing the sinkhole the Jasens deposited the insurance check for an undisclosed amount into a bank account, as stated by the U.S. attorney’s office.
The Jasens then put the home up for sale, and in the real estate disclosures given to the purchaser of the house, they failed to disclose the sinkhole and the claim on the property, according to the indictment.
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Florida House of Representative, John Tobia of the 53rd district, has introduced CS/HB 669 which addresses consumer issues related to “Assignment of Benefits”. The bill is still alive after a hearing on March 19, 2015 in front of the House Insurance and Banking Subcommittee. The bill addresses insurance-claims issues regarding AOB’s dealing with property insurance. An AOB occurs when a policyholder has a loss and signs a contract with a third party to reconcile the damage. Once the AOB is signed the contract allows for the third party to be assigned the proceeds from the homeowner’s insurance policy. AOB’s are currently a hot topic with property insurance carriers and for years have been the keystone of PIP/No Fault Litigation.