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Rollout of property insurance fraud squads spikes Florida prosecutions

By Michael Carroll
Aug 5, 2022

Months of work by newly created insurance fraud squads has led to a more than twofold increase in successful property insurance fraud prosecutions across Florida, the state’s chief financial officer reported.

CFO Jimmy Patronis said last month that the deployment of two new 12-person insurance fraud units in Central Florida led to the opening of nearly 200 cases that so far have netted $300,000 in restitution. In turn, the number of fraud cases are up 148%, arrests have risen 55% and successful property insurance fraud prosecutions have increased 129%, Patronis said.

“That’s tremendous progress in just one year to protect insurance consumers from fraud and help combat rate increases statewide,” the CFO said in a prepared statement.

Mark Friedlander, spokesman for the Insurance Information Institute, said the rollout of insurance fraud by units created last year by the state Legislature is welcome news in a state where property-claims fraud is prevalent.

“We are glad to see the Florida Department of Financial Services investigative units crack down on these fraud schemes,” Friedlander said in an email to the Florida Record.

Bad actors involved in roof-replacement schemes in Florida typically commit property insurance-related fraud in two ways, he said. They may offer to reimburse homeowners’ insurance deductibles in return for signing an advertising agreement in which their names and addresses are mentioned in marketing materials – even though reimbursements for insurance deductibles are illegal in Florida, according to Friedlander.

Another fraud technique is to cause purposeful damage to a roof in order to validate a bogus claim, he said.

“Specifically, we are seeing rampant roof replacement fraud schemes in communities across the state,” Friedlander said. “This is where unscrupulous contractors scam homeowners by going door-to-door and claim there is storm damage to the owner’s roof, when typically there is not.”

Questionable claims, he said, are often followed by lawsuits filed by unscrupulous trial attorneys. This year Florida is on track to see the filing of 130,000 litigated property insurance claims, representing about 80% of all such lawsuits in the United States, according to Friedlander.

“In contrast, Florida accounts for about 8% of U.S property insurance claims annually,” he said, adding that the average Florida homeowner pays a home insurance premium that is nearly triple the U.S. average.

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