Property insurance fraud investigations and arrests are up but they’re still a drop in bucket
If you want to know why insurance companies often take adversarial positions toward homeowner claims, look no further than the number of fraud cases investigated each year.
From double dipping — filing claims for the same damage to two different companies — to buying homeowner insurance for properties operating as assisted living facilities, there’s no end to schemes some policyholders, public adjusters, contractors and agents will employ for financial advantage.
Fraud is one of several reasons that insurance rates in Florida have skyrocketed over the past five years. But even as the state increases its fraud-fighting resources and investigates more complaints each year, the number of arrests and convictions that result from those investigations is surprisingly low.
In fact, less than 2% of investigations opened by the state Department of Financial Services results in a conviction.
Insurers, it seems, can easily deny coverage of claims and cancel policies when they suspect fraud, but prosecutors require more evidence to bring criminal charges against alleged perpetrators.
Recent examples of fraud reported this month by state-owned Citizens Property Insurance Corp. include a May arrest of a public adjuster, Yoel Sainz Fraga, in Miami, accused of offering an elderly homeowner a free inspection by telling her he was a “government inspector,” then filing a $13,000 insurance claim for water damage to the homeowner’s kitchen sink without the homeowner’s knowledge. The problem, the report cited, was that the kitchen sink wasn’t damaged.
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