Florida's new insurance consumer advocate said this week that she wants insurance companies to produce data to back up their statements about rising water damage claims in South Florida.
Sha'Ron James, who has held the statewide, state-funded position since August, has asked the top 15 insurers to document their assertions that non-weather-related water damage claims from South Florida have spiked.
Michael Peltier, spokesperson for Citizens Property Insurance Corp., said Citizens is seeing higher claims in South Florida, particularly Dade and Miami counties that they are seeing elsewhere in the state, and that the claims can’t be explained by an particular factor.
“Frequently our first notice of loss is coming when property owners already have third-parties involved, whether attorneys, public adjusters or contractors,” he said. Peltier said he could not speculate as to whether third parties were putting people up to filing claims, but did say “fraud is probably part of the equation. How much, we don’t know.”
Peltier said Citizens encourage policyholders to call Citizens first — and not a third party — when reporting a claim. “Costs just go up when third parties get involved,” he said.
Other insurers have raised the issue as well, saying attorneys, contractors and public adjusters are suspected of encouraging homeowners to submit water damage claims and then sign the benefits of their insurance policies over to a third party. One insurance company representative, speaking off the record, said James already has the data and seems to be “showboating.” She did not quickly return a call seeking comment.
“What’s going on is this: No one really needs an attorney to file a notice of loss on a water damage claim. That in and of itself is suspect,” said Lynne McChristian, spokesperson for the Insurance Information Institute. “In the not-too-distant past, as little as three years ago, a homeowner would file a water damage claim directly with the insurer. And, that makes sense. Give your insurance company a chance to do the best job possible to help you with your claim. If you are dissatisfied, then – perhaps – you can call an attorney.”
Claude Hanuschak, COO and president of medical services firm and a board member of the Florida Association for Insurance Reform, says he thinks there are bad actors on both sides. He says some of the largest and most respected insurance companies have employees who drag their feet on investigating and settling claims and also incent employees “to do the wrong things.”
He also acknowledges that third parties often prey on people in South Florida, which he calls a mixing pot of cultures and also a place that is home to many senior citizens. “There is no question some people prey on senior citizens and other groups.”
He expressed confidence that James will sort things out. “We’ve had some pretty good experiences with Sha’Ron. I think she is determined to do right by the people of Florida,” he said.
