Fraud Report

Florida’s Citizens Launches Campaign to Combat Abuse Claims

Citizens Property Insurance Corp. has launched a multi-faceted education campaign in an attempt to combat what it has called a disturbing increase of fraud and abuse in the state. The company said in a statement the campaign will work to improve customer claims handling and address the abuse that is threatening to drive up premiums statewide.

The “Call Citizens First” campaign will focus on educating policyholders and agents about contacting Citizens immediately after any type of loss to their property. The insurer said it will also work to educate customers that fraud, abuse and other factors can increase property insurance costs.

“Call Citizens First benefits our policyholders by keeping them in the driver’s seat regarding their claims while proving long-term savings that helps everyone,” said Chris Gardner, chairman of Citizens Board of Governors.

The campaign will include policyholder mailings, social media messages and additional public outreach.

In February, all new and renewal personal lines policies began receiving a Citizens ID card with their policy declaration packets. The wallet-sized card will include policy and agent information, along with claims hotline and customer care numbers.

A brochure which explains the claims reporting process will also be included with policy documents. Citizens said the brochure provides an overview of what to expect once a claim has been filed.

In recent years, the company said it has seen a flood of water-damage claims and associated litigation, particularly in Miami-Dade County, where water-loss claims now account for more than half of every premium dollar collected. Citizens said the issue, though concentrated in South Florida, is spreading throughout the state.

In 2014, Citizens said about 40 percent of policyholders filing water-loss claims in Palm Beach, Broward and Miami-Dade counties hired third parties such as attorneys and/or public adjusters even before filing an initial claim with the insurer, and they often signed agreements assigning benefits to the third party.

A review conducted for the Florida Office of Insurance Regulation (see page 1) found that assignment of benefit agreements lead more frequently to litigation and increases the cost of the claim to nearly four times that of a non-litigated, non-assigned claim.

Georgia Arrests 7 Behind Insurance Fraud Scheme

Georgia Insurance Commissioner Ralph Hudgens announced the arrests of six Colquitt County residents and a Clayton County woman involved in a staged insurance fraud ring. A joint investigation by Hudgens’ Insurance Fraud Division and Fire Investigation Unit revealed the suspects staged numerous fires, residential burglaries and automobile vandalisms with the sole intent to commit insurance fraud for financial gain.

Arrested and booked into the Colquitt County Jail were Ricky Lewis Forrest, 26; KaNaya McGee, 35; Diana McGee, 55; Cachea Jones, 25; Shikia Latimore, 21; and Lvariaus King, 24; all of Moultrie, Ga.

Also arrested and being held in the Clayton County Jail is Doris Ann Buie, 49, of College Park, Ga.

The investigation revealed that between January 2013 and December 2015, the suspects staged more than 24 incidents and received claim settlements from Allstate, Assurant, GEICO and Georgia Farm Bureau insurance companies totaling $392,000.

Each suspect is facing numerous charges including first degree arson, insurance fraud, theft by deception, identity fraud, forgery and making false statements.

“Not only did these individuals endanger the lives of others by setting fires, they also committed insurance fraud, a crime that costs Georgians thousands of dollars each year,” Commissioner Hudgens said.

Insurance fraud is a felony with a penalty of two to 10 years in prison or a fine of up to $10,000.

First-degree arson is a felony with a penalty of five to 20 years in prison and/or a fine of up to $50,000.

North Carolina Insurance Agent Charged with Embezzlement

The North Carolina Department of Insurance reported the arrest of a Fremont, N.C., insurance agent for embezzling insurance premiums from his clients.

North Carolina Insurance Commissioner Wayne Goodwin announced the arrest of Jacob Christopher Mullins, 28; he is charged with one count each of embezzlement by an insurance agent, financial card fraud and obtaining property by false pretense.

NCDOI criminal investigators accused Mullins of taking money from insurance customers at a Wilson County insurance agency without applying it to their insurance policies between January 2014 and January 2016. Investigators also allege Mullins used customer’s cards to make insurance purchases without their consent.

Mullins was arrested in Wilson County on Feb. 15 and placed under a $3,000 bond.