AOB…The Blame Game!

Chatting recently with a Tallahassee realtor friend of mine I learned that homeowners in several upscale neighborhoods were getting new roofs. “For Free!” she said, excited about their good fortune and, I assumed, how it might help the Real Estate market, particularly the sale of older homes.

The events she described were courtesy of the same contractor; Delta Management & Construction.

I pounced–showing her the door-knob hangers carriers had already sent me and explaining how her clients were possibly exposed not only to poor workmanship, but…to the consequences of partnering in an insurance scam.

“Really?” she asked, then in her own defense added… “They actually found some hail damage, you know.”

“Of course they found damage”, I thought but did not say.  From my experience with other similar scenarios, “They always do!”

I told her that insurance doesn’t pay for gradual wear and tear or deterioration. It covers damage that is “sudden and accidental.” I challenged her to align this fact with the fact that there was no hint of roof damage until two years after the alleged hail event; and then, only after receiving the promise of a free roof!

I spoke of the shenanigans I’d previously reported on in Homosassa Springs. Upscale older neighborhoods with lots of aging roofs were (are) under siege from contractors with the same modus operandi as some in Tallahassee–they’re from “out-of-town”, handing out flyers, hiring subs, and getting Assignment of Benefit (AOB) contracts signed before their free damage inspection inevitably reveals hail damage–two years after the storm!! Recently, alert readers have begun emailing me from other parts of the state as well. (See NOTE #1 below)

The AOB scam (and, that’s what it is) succeeds in large measure because abusers (including homeowners) can always blame someone else. No one is really, demonstrably, culpable.

Of course I understand–no homeowner will be prosecuted for signing an otherwise legal AOB contract merely because it facilitates the defrauding of an insurer by a third party. But… that doesn’t mean it isn’t dishonest to do so. Possibly, even legally, maybe it’s fraud. Especially if the homeowner “…knew, or reasonably should have known…” there was no “event” and no compensable damage.

Here’s the thing. One insurer making AOB payouts both in Tallahassee and Tampa Bay reported that its’ hail claims on residences with pool cages are rarely accompanied by a claim for pool cage damage. Roof damaged to the point of total replacement but, an unscathed screen enclosure? No damage to the family car, the boat, the camper. Just a total loss to the residence roof?

A respected Tampa Bay meteorologist reporting on virtually every hail event over the last 20 years, said none of those storms (that’s zero) could’ve damage someone’s roof, much less required it to be fully replaced.

Are you getting this?

My home in Tallahassee went through the same weather event as those alleging damage in adjacent neighborhoods.  How come there’s no damage to my roof, or those of my neighbors? How come there’s no damage to those living right next door to those filing claims?  Better, newer roofs, maybe, but…how come the pool cage on the house right next door to the damaged roof is unscathed?

In one Homosassa Springs neighborhood nearly 200 building permits for new roofs have been issued in the last year alone–98 from one “out-of-town” roofing contractor.  No pool cage claims, I’m willing to bet.

Why doesn’t anyone think something is wrong? Answer: they do but, nobody cares–certainly not the glad-to-get-something-for-nothing homeowners. And, certainly not the neighborhood association which has not only encouraged its members with old roofs to get replacements but, which has board members who’ve recently replaced their own roofs and are now receiving kickbacks for referring other residents.

AOB removes the guilt.  “It’s the contractor who’s dishonest, not me.”  That’s the blame game!

Another insurer reported its hail claims have increased 96% in the 1st quarter of 2015 over the 1st quarter of 2014. That’s without a single significant wind (or hail) event. And, there’s been a 56% increase in wind claims as well. (See NOTE #2 below)

Now get this: the same carrier reports that of the 2,422 wind/hail claims filed in 2014, in the counties of Orange, Lake, Pasco, and Hillsborough, 72% came from the same three(3) roofers.

That’s right, 3 out of every four roof damage claims, a total of 1,743 just for one insurer, all came from either Jasper Contractors, Dimensional Construction or a company called Noland Roofing, Inc. out of Clermont.

Ring any bells? (See NOTE #3 below).

So what’s the takeaway from all this?

Maybe it’s just that, when it comes to the AOB blame game, we’re all to blame–irresponsible homeowners looking to save money, unethical fly-by-nighters taking advantage, insurers paying suspicious claims too quickly, agents not reporting suspicious activities, complicit neighborhood associations and legislators blaming the clock instead of themselves for failed reform efforts.

My next report will focus on how attorneys and water remediators play “The Blame Game”; perhaps better than anyone else.

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NOTE #1: This email came from an agent in Jacksonville. “An insured of mine called because she had a contractor knock on her door after recent weather reports that we had tornado activity here in Jacksonville. We are already getting emails from carriers trying to combat these predators before they start but they aren’t quick enough to the punch because our insured already had a man at her door with promises of a new roof from her carrier who he claimed they would pay for the whole thing and he could file the claim and handle it from beginning to end for her, all he asked her was who her company was and if he could look at her roof. She let him look and told him she had to talk to her daughter who was an attorney and told her that the man was right in that the company would pay for damage that was attributed due to storm damage and that it may not include all of the roof like the man said but could be some of it. I advised her that if she believes she has a loss due to a covered peril she should file a claim and let the company adjust it.  A quick read of the website shows it’s a company that uses a franchise type program…. I have reported these before on behalf of our insured’s but I believe you have a better handle on the severity of it all and I only see a small glimpse of what is in our back yard. I would love to provide you more information. Right down to a copy of the business card which she was nice enough to mail to me. You can call me or email me. I follow your blog and know that you are the best advocate for my insured’s more so than any other voices out there right now.

NOTE #2: In 2014, this carrier received 2,422 total wind/hail claims out of 8,600 total claims or 28% of its total claims volume.  Historical normal frequency of hail had been  1-2%.  In 2014, hail accounted for 12% and in first quarter of 2015 hail accounted for 15.6% of total claims.

NOTE #3: You can click each contractors name above for their corporate history, complaints, arrest records if any, and more. Noland Roofing, in particular, appears to have less than a stellar reputation.  In an Orlando Sentinel editorial Carol Dornan, a retired Detroit police-department detective and Greg Noland owner of Noland Roofing both blamed AOB problems on insurance companies and their lobbyists. They urged roofers to unite against AOB reforms but ignored the fact that the vast majority of roofers, the ethical ones who never use AOB, have also directed their lobbyist to support an outright ban against the practice.

In addition to the above link, an internet site called “The Rip Off Report” has at least one very unflattering complaint against Noland Roofing. Unsubstantiated comments from only one customer but, none the less, consistent with the above link and with other reports on roofers who use AOB and promise “Free Roofs.” 

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