Leaky pipes a figment of fraudsters’ imagination

By Lynne McChristian February 5, 2014

Scenario: A friend of a friend says he has a way for you to make a couple of hundred bucks, plus get new kitchen cabinets, upgrade your plumbing and get a new tile floor at the same time. Something like that must have been said to the dozen Miami homeowners who took the bait and wished they hadn’t after they got arrested for insurance fraud last week.

According to fraud investigators, a licensed public adjuster and a plumber coached homeowners on how to file fraudulent insurance claims for pre-existing – or non-existing – water damage. A TV news report on “Operation Leaky Pipes” says the homeowners either created damage or faked it to make a claim on their homeowners insurance. What must have sounded like an easy way to make money turned into a costly error of judgment.

Another 14 people got arrested yesterday for staging fire and water damage claims. Investigators say 13 homes were set on fire. The arson was crafted to look like an electrical or kitchen fire. Lucky for the rest of us that arson investigators can tell the difference between a set up and the real thing.

I wish I could tell you this sort of thing is rare, but it’s not rare enough. If you like stories that continue to prove why crime doesn’t pay, check out the “cases of interest” that Citizens Property Insurance is investigating, such as the one where it paid a water-damage claim for soggy kitchen cabinets. The homeowner cashed the check, never replaced the cabinets, and then the spouse filed another claim for the same damage. Really.

Insurance fraud is a crime, and state fraud investigators, law enforcement, insurers and the  National Insurance Crime Bureau are aligned to fight it. Be glad they do because the bill for the cost of fraud is one all honest policyholders pay. Fraudsters think they are stealing from the insurance company, but they are stealing from you.