Beware of Fraud—Florida

Amount: Unknown

Survivors of Hurricanes Harvey and Irma will soon be returning home to the vast amount of destruction left by the storms. The two storms each brought different threats; Harvey dumped trillions of gallons of water on Houston and the surrounding areas in just a few days, while Irma is the first storm in the world to sustain winds of 185 mph or more for more than twenty-four hours in a row. The difference in types of destruction may cause different fraud risks. For a more complete analysis of fraud fighting in Texas in the aftermath of Hurricane Harvey, see Threat of Fraud-Texas.

Damage from Hurricane Irma will create opportunities for “storm chasers”, or fraudsters, who are working hard to profit off the disaster. As an insurer or FEMA employee, you can detect fraud by paying attention to details and being meticulous in investigations. A homeowner may misclassify flood damage as a different type of damage that would be covered under their homeowners policy. A homeowner located far away from the danger zone might file a claim for damage that was “caused” by the disaster at hand. Also, bids from contractors can be inflated in order for a certain contractor to receive a higher payout for a job that the insurer will ultimately be responsible for paying.

As a homeowner:

1.Do not sign anything. A fraudster may ask a homeowner to sign an Assignment of Benefits (AOB) to start repair work. By signing an AOB, a homeowner turns over their homeowner benefits to a vendor or contractor, giving the vendor liberty to inflate the cost of claims and file lawsuits against insurance companies to dispute claim costs. Some people blame the recent hikes in homeowner insurance rights on an increasing number of Assignment of Benefits cases.

2.Do not pay for repairs upfront. If a repairman asks for a large sum of money upfront to purchase supplies and equipment, don't give it to him. He could disappear into the wind or perform substandard work on the home.

In order to prevent fraud like this, get a written contract detailing specifically what work will be done, what supplies will be used, and what the cost will be for labor and materials. If the repairman demands payment, try not to pay more than ten percent, and get a copy of some sort of receipt.

3.Verify that charities are legitimate. If you want to donate to a charity, type the name of the charity in to the search engine instead of clicking directly on a link.

4.Do not pay money demanded through a robocall. A robocall tells a victim that their insurance premiums are late and if payment is not sent immediately, their homeowners policy will be cancelled. If an insured receives a robocall, they should call their insurance agent directly for reassurance that payment is not required.