Florida Insurance Regulation Office Investigating Insurers for Fraud

After the passage of the comprehensive tort reforms to Florida’s insurance laws in March, it has become clear that major changes are coming to the state’s property insurance market. While the statutes passed primarily focus on preventing fraud by insured parties, state legislators have not ignored the actions of insurers. 

On March 24th, 2023, the same day as the passage and immediate implementation of HB 837, Florida Governor Ron DeSantis confirmed that the state’s Insurance Regulation Office had opened an investigation into alleged fraud performed by multiple insurers. This investigation is centered on a flood of reports that individuals were illegally underpaid or dropped by insurers attempting to save money. 

According to the allegations, it became a common practice among insurers in the state to amend adjuster reports. While amending reports is sometimes necessary, the scale and circumstances of these alterations far exceeded what could be required. Public adjusters state that they would submit reports to insurers only to find out their documents were immediately amended to reduce the amount the insurer would have to pay. 

This is supported by statements made by the insurance industry watchdog, the American Policyholder Association (APA). The APA has reported that some companies cut adjusters’ repair estimates by anywhere from 50-97%. This practice appears to be entirely focused on saving the companies money at the expense of their customers. 

Additionally, many individuals have had insurers drop their policies, leaving them without coverage. Insurers can only drop or refuse to renew policies in specific situations. The number of dropped policies appears to exceed all reasonable estimates, suggesting that this is another potentially unlawful cost-cutting measure.

What makes these practices even worse is the fact that insurance rates have been skyrocketing statewide for years. Insurers are bringing in more money than ever, yet according to customer allegations, they are violating contracts and state laws to save money. 

While the investigation is still underway and results have not yet been announced, the Insurance Regulation Office may impose civil and criminal penalties for fraud. In the meantime, insured people who are victims of insurer fraud can file claims to pursue compensation for what they’ve lost. 

Types of Insurance Fraud Committed by Insurers

Insurers are held to strict standards of behavior because they have significant incentives to be dishonest. They receive monthly payments from their clients but only need to pay out if they approve claims. As such, it is a well-known tendency among unethical insurance companies to deny or underpay claims to save money and increase profits. 

There are several ways that insurers can defraud their customers, such as:

  • Denying claims: An insurer may deny a claim that should be covered without good reason in the hope that the customer will not pursue the matter further.
  • Underpaying claims: Similarly, a company may make an illegitimately low settlement offer in the hope that the customer will be desperate for any help they can get.
  • Delaying claims: Unethical insurers will often combine underpayments with delayed responses, hoping to put pressure on the insured to accept the first offer rather than keep putting off repairs.
  • Altering adjuster reports: According to the allegations, companies have begun altering adjuster reports to support underpayments and denials of claims that should be covered in full. 
  • Dropping policies: If an insurer simply doesn’t want to deal with a customer’s claim, it may drop their policy entirely, without regard for laws barring dropped policies after hurricanes and other significant events.

Has Your Insurer Defrauded You?

If you suspect your insurer is acting in bad faith, you don’t have to accept their behavior. If you notice the following problems, you may have grounds to take legal action against the company to receive the compensation you’re owed:

  • Failure to communicate: Insurers must promptly respond to claims and requests for information. They are also required to provide clear and accurate responses. If you’re struggling to get a response, the company may not be acting in good faith.
  • Unnecessary, significant delays: Similarly, insurers have to take prompt action to investigate and approve or deny claims. If it’s been over a month and you haven’t heard anything, there’s a problem. 
  • Lack of support for denials, underpayments, or dropped policies: Whenever an insurer denies a claim, it must provide a reasonable explanation as to why. It must also explain why it has dropped a policy or paid less than the claimed amount. Failing to give an answer is often a sign of bad faith.
  • Contradictory explanations of how your policy works: If you can’t get a straight answer from the company about what your policy covers, it may mean it is acting in bad faith and attempting to defraud you.

All of these are signs of bad faith insurance which mean it may be time to consult a skilled attorney

What to Do If You Have Suffered Insurance Fraud

If you have had your policy dropped, a claim denied, or received an insultingly low settlement offer, you may have suffered from bad faith insurance fraud. If so, you can get help. The first step should be to discuss your situation with an experienced insurance lawyer like those at The Professional Law Group in Miami, Florida. 

Our experienced attorneys are deeply familiar with the laws affecting Florida insurance companies. We understand how unethical companies try to exploit the people they are supposed to protect. We can help you fight against insurer fraud and bad faith throughout Florida. Do not hesitate to get help if you have any questions. You can call our firm at 954-266-0934 or reach out online to schedule a free case review. Get in touch today to discuss your situation and discover the next step toward holding your insurer accountable for fraud.

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