The Maryland Insurance Administration (MIA) has issued civil administrative orders against five individuals and four companies for insurance fraud, and for acting as public adjusters without the proper license.
A release from the state insurance regulator said that the individuals and companies served with penalties have been ordered to pay a total of $480,000 in fines.
According to the regulator, there have been “dishonest and predatory actors” that have lured homeowners into paying for unnecessary or inflated repair work, suggesting that the repairs are covered by their insurance. Those unscrupulous contractors then offer to act for the homeowner in negotiations with the insurer – an act that violates state licensing laws.
MIA stated in a release that these activities have often followed disasters or storms, and have “certainly spiked during the pandemic.”
After investigations that uncovered their involvement in the fraudulent practice, MIA issued orders against Cornerstone Building & Restoration and owner David Dallmer; Xpress Exterior Design and employee Joseph Zacot; Royal Public Adjusters and owner David Lee; public adjuster Sam S Juma; James Park; and Halo Construction and Restoration.
The public adjuster licenses of Juma and Royal Public Adjusters were also revoked as part of the civil administrative orders.
Maryland insurance commissioner Kathleen A. Birrane explained that the pandemic has not deterred the MIA’s efforts to protect insureds from “claim predators.”
“If anything, our teams have been extra vigilant in assuring that homeowners are not induced into filing questionable claims through fraudulent practices,” Birrane said in a statement, adding that there are other companies still under investigation.
The commissioner warned consumers that if anyone shows up at their door offering a new roof after a hailstorm, or is offering to get their insurer to replace their deck, consumers should “think twice and do [their] homework.”
The practice of a vendor taking on the negotiating rights of a policyholder in order to bill insurers is called assignment of benefits, and it has been a growing problem in areas where insurance premiums have spiked as a result of a surge in vendors filing lawsuits, such as Florida.