Quote for Homeowners Insurance | Last week we wrote about unusual claims covered by different homeowners insurance companies. This week we want to examine another aspect. Fraud. There's a flip side to funny or unusual claims. While insurance companies are in business to cover legitimate claims, sadly, every year thousands of fraudulent or downright criminal insurance claims are made, costing insurance companies and the American public billions.
How bad is the insurance fraud problem? Not long ago, the industry staged a phony accident on the New Jersey Turnpike with a bus whose every passenger was a fraud investigator. More than 100 fake claims were filed by people who either jumped on the bus after the accident or were passersby.
Insurance companies are more serious than ever about cracking down on fraudulent claims, both here in Florida and nationwide. They established and fund the National Insurance Crime Board to investigate fraud. One of its tools? A secret list of 23 suspicious claim indicators.
Insurance companies themselves also employ thousands of investigators, many with experience in local law enforcement or the FBI, to ferret out bad claims. They use special databases designed to detect patterns of fraud such as repeat claims, and train agents to look for "tells," or signs that a claimant is lying. (One telltale clue: being totally calm and unflustered despite submitting a big claim.)
While people who file fake claims might think they are beating the game, thousands wind up in jail for years, decades even, when their schemes unravel.
Many of these people weren’t evil or bad. They just didn’t think through what they were doing and why.
Here are just a few example:
UP ON THE ROOF
Think it would be easy to fake storm damage to a roof? That's what a Rhode Island deejay thought too. She needed a new roof and didn’t want to pay for it. She asked two friends to help her collect on a phony roof damage claim. One guy punched a tree branch through the roof and the other scattered refuse in her house and pool to look like storm damage. Then she bribed an independent insurance adjuster to back up the phony claim.
The insurance company initially believed the bogus claim and paid out $40,000.
Then one of the men was caught on tape bragging about the fake damage. He got six years in prison after being convicted. The other man lost his state job. The homeowner and the insurance adjuster also lost their jobs, and both had to spend months in halfway houses and under home confinement. The homeowner also suffered a huge public embarrassment, since she was a well-known radio personality in the area.
Some frauds fall solidly into the "You've got to be kidding me" category.
Take, for example, the Georgia farmer who decided that his expensive farm machinery presented a way out of a financial hole he was in. So he dug a real hole, buried his 17-ton cotton picker and then posted a $100,000 claim for its loss. He got caught when a neighbor spied a bit of John Deere green poking up out of the farmer's pasture. It took 12 hours to excavate the machine. The farmer was arrested and paid court-ordered fines. Again, his reputation was ruined.
A Delaware state man was convicted of fraud after an unconvincing story about how he set both his home and his convertible on fire. The man claimed two pans caught fire while he was cooking. He said he threw one flaming pan out the front door, where it accidentally landed in the front seat of the car. He said then he grabbed the second pan, tripped on the way outside and dropped it on the couch. He paid nearly $40,000 in restitution and got five years of probation for insurance fraud.
American Integrity Insurance is committed to providing Florida homeowners with sound, comprehensive insurance coverage and an extraordinary customer experience. We strive to be a valued partner to our policyholders, agents, and community.
We offer traditional and high valued homeowners insurance, condo insurance, renters insurance, and the special coverage required for vacant homes, manufactured homes, and policies designed for those who need less coverage or are renting out their home. We also offer extra protection, including flood insurance, umbrella insurance, golf cart insurance, boat insurance, cyber coverage and identity theft protection as well as equipment breakdown coverage, to help address a broad range of needs facing Florida homeowners today.