The cost of insurance fraud is a cost all policyholders wind up paying. Consider that fraud adds about $34 billion each year to the property/casualty insurance sector’s incurred losses in the U.S. That equates to about 10 percent of the cost of insurance. The victims of this fraud are…..everyone.
Florida CFO Jeff Atwater heads the state’s Bureau of Insurance Fraud, which consists of 117 sworn officers plus support staff. He’s been championing fraud awareness and recently published a newsletter with a story about an Orange County man who paid someone to torch his car. This person filed an insurance claim, got paid, got found out – and got jail time. The newsletter said the arson claim cost the insurance company $10,000, and it may cost the perpetrator up to 20 years in jail.
The state has a fraud tip line: 1-800-378-0445. There is also an online form for reporting fraud. We’re in this fight against fraud together.
“Don’t do the crime, if you can’t do the time.” That’s a line from an old TV show from the 70s that anyone who is texting and driving these days probably never viewed. There’s a law against texting and driving, and many will tell you it lacks “teeth” because it is a secondary offense in Florida. That means drivers need to be caught doing something else wrong before they can be ticketed for multi-tasking with their cell phones behind the wheel. The fine for this dangerous behavior is just $30. Does that fit the “crime”?
Some perspective on traffic fines: If you drive with an expired drivers’ license, the fine is $250. I felt very sorry for the student on campus last week, as he was getting a ticket for weaving his scooter around a restricted parking gate. Fine: $170. If you fish without a license, the fine is $100. (With or without a fishing license, the fish do die.)
There are more than a half-million professionals employed within the U.S. property/casualty insurance market. And, if you ask many of them how they got into the industry, most will call it a lucky break. My such stroke of luck occurred decades ago. I was working for a real estate developer, the housing market took a(nother) crash, so I needed to find work. A survey of the marketplace introduced the tremendous opportunities in the insurance field and brought me a wonderful, rewarding career. I highly recommend it!
Too much rain is a dangerous thing, and so is too little rain. Everyone knows the weather is changeable, and it changes so much that threats from natural disasters come and go like the wind. There are parts of Florida that are abnormally dry for this time of year. Drought conditions put Central, South and Southwest Florida on alert. Check out this interactive drought monitor to get a better sense of what’s happening now.
Last week, 11 homes were destroyed by wildfires in Polk County. The typical homeowners insurance policy does cover wildfire risk. And, it’s a smart idea to be aware of your wildfire risk. The Florida Forest Service has wildfire risk assessment tools. Check them out and be FireWise.
What happens when you let a third party handle your insurance claim? The answer, in a symbol, is $. Insurers have been sounding alarms about assignment of benefits for a couple of years now, and the issue is ever more in the spotlight. A recent editorial suggests it is time to bring water damage abuse under control.
Here’s what’s been happening: A homeowner with a water damage claim is convinced by a contractor to assign the insurance benefits to him. The contractor stands in the shoes, so to speak, of the insured and deals directly with the insurance company. The problem with that is it can make the claim needlessly more expensive because it links in (sometimes needlessly) additional contractors and leads to (oftentimes needless) litigation.
Last week, at the annual Insurance Summit hosted by the Florida Chamber of Commerce, Florida’s CFO Jeff Atwater said his Bureau of Insurance Fraud arrests an average of four people a day. That’s both good news and bad news. It’s good to put fraudsters out of business since insurance fraud is not a victimless crime; honest people pay more than they need to for insurance since the cost of fraud inflates the cost of claims. But the “bad news” is that fraud fighters have always been kept busy, and they seem to be getting busier.
Just take a look at some of the news stories from the past week.