Assignment of Benefits…an explosion!!

As bad as things are with AOB, including yet another bad decision from the 1st DCA affirming that courts are powerless to protect consumers, it now appears the scam has launched into the stratosphere!  (See NOTE #1 below).

An explosion of abuse, and aggression from the abusers, has mushroomed property litigation to a point “..unthinkable a year ago”.

As you’ll read below I’ve learned this from reliable industry organizations, claims personnel and litigation experts. But, also from the growing frustration apparent in anecdotes received from agents, insurers and, public adjusters–and a growing number of consumers increasingly concerned over the aggressive pitch from people they don’t know, working for vendors they’ve never heard of.

“…I just wanted them off my property” one consumer told me; even hinting he’d hire a private investigator to gather evidence.

The unsavory tactics are so suspicious some homeowners are turning away the pushy come-ons and “Googling” words like “roofers”, “water extraction” and “fraud”.

My blog pops up. They send me an email.

This, from a Tallahassee doctor last week…

“Hey I just saw your blog on roofing scams and hail damage.  Good article.  I was just approached by DDC with same tactic on my … home. In my case I’m pretty sure they actually pulled a few shingles free to sway my opinion. I now need to have this repaired.  It just seemed scam like…I hope they didn’t create any false hail damage elsewhere on the roof , as I will get stuck with repairs…

Agents, too, are getting very anxious.  Here are some sample excerpts…

“…They are coming in at a rate of about one every 3 days. This is terrible. I may lose some contracts; I can’t sell enough to keep up with this garbage. We may implement a marketing plan that involves only 2010 and newer homes. And then they’ll find a way to screw me on those.

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“…one of my insured’s got his roof claim denied by a company that the roofers know deny them…the roofer said if you had anybody else it would be paid…they know which [insurers] pay and which ones do not…our customers call and try to get out of this company and I’m like you already filed, can’t change the date of loss…you have existing damage…”

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“One of our companies has begun denying these with a pretty clever assertion- kind of a “Yeah, you may have hail damage,” BUT: it’s granular (cosmetic), and after checking weather records there were six hail events in the past so many years so 6 deductibles would apply even if we were able to determine what we were responsible for, but since you waited a year since the last one (timely filing) we cannot determine. Pretty ingenious…something like a 9 bullet point reason why they can’t pay.”

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“Scott: Thought you would enjoy this–The insured I contacted you about a few weeks ago, she didn’t file a claim but did get a new roof!  I got her wind-mit last week.  Come to find out she lives behind diagonally to my boss. The guy who knocked on her door and came back with the hard sell telling her about all of the neighbors on her street and the street over getting theirs done. Well he wasn’t fibbing, one lives across in front of my boss.  If you read their website like I did you know that they pay the insured’s deductible by “advertising” in their front yard. Well they aren’t advertising as a roofing contractor, they are “Insurance Claim Specialists” and they are handing out roofs paid for by “Storm Damage Claims,” don’t ya know??  I went back and checked the business card to this sign and sure as shingles on toast, it’s the same number.” Emphasis added. 

One of the dozen or so insurance companies represented by an agent sent me a copy of an email sent to “all” carriers the agency represented.

“I just want to make each of my …companies aware of something that has come to the Agency’s attention. There are several ‘Companies’ in [our] area that are knocking on doors asking to inspect the roof. They of course find several things wrong and tell them they need a new roof and they should file it on their Insurance Policy. I had one customer call to tell me they were watching these people on their neighbors roof pulling up shingles and other things to create the damage. They always tell the homeowners the damage came from storms from last year! I have (2)two company names that we have been able to find out. The names are: Great White Construction Co. and the other is Brink. We have also been told there seems to be a Public Adjustor involved with some of them as well. Not sure if you can do anything with this other than make your Claims people aware. Thanks for your time and have a great day!” Emphasis added

So you see, there’s plenty of empirical happenings to justify my charge of a litigation explosion–especially when you combine the street level commentary above with the carrier stats and DFS reports I’ve provided previously. (See NOTE #2 below).

But, for those still unmoved, maybe the following will help. It’s from CaseGlide, which provides Florida insurers a product to help reduce litigation costs via a unique case management software program.

CaseGlide sent the following unsolicited email after my last blog. I repeat: the following was “unsolicited”:

“Insurers have been telling me about all of the lawsuits they have been receiving lately. Just massive increases these last couple of months. Today I went and reviewed the numbers. WOW!

HAVE YOU SEEN THE DRASTIC AMOUNT OF LAWSUITS FILED RECENTLY? Its bigger than it has ever been before.What have you been hearing?”  

                              Wesley Todd, CEO

After responding, I learned that CaseGlide is conducting a study of the spike in litigation. It’s due out later but, when I asked for some preliminary indications, CaseGlides’ CEO responded as follows:

“In the past couple of months, lawsuits against insurers are skyrocketing. We’re seeing numbers no one could have never imagined a year ago. Many of the top 5-10 Florida domestic insurers are being sued at rates over 70 to 80 lawsuits per month. Some of these insurers have received 10 lawsuits in one day, or 20 lawsuits in a single week. 

For those who don’t know, this was unthinkable a year ago. Depending on which insurer you are researching, these numbers reflect a 50% to 100% year over year increase in lawsuit rate. 

What’s this mean? Double the compromised settlements. Double the legal fees. Double the adjusting expenses. 

What’s going to happen if it keeps up? Don’t be surprised if all insurers have to increase their premiums 5% – 10% in some areas. Citizens already has the actuarial data supporting that. 

So who will pay for all these expenses and attorneys’ fees? The insurers temporarily, but the policyholders eventually.

What is responsible for this once-in-a-decade claim explosion? You guessed it. Water mitigation contractors suing insurers using AOBs. 

Who is responsible for it? A few attorneys and a few contractors. 

It seems that, once the contractors and attorneys won the AOB court cases and legislative battles, they deployed all their ground troops to consume as much policyholder premium as possible.”

#end#

NOTE #1: On Wednesday, July 8th, the 1st DCA ruled against State Farm allowing United Water Restoration to sue for payment of a $2,744 invoice for extraction that was performed to remediate an “uncovered” loss due to exclusions for “repeated seepage, rot & decay.”  The five page decision, which you can read here, cleared the way for United Water and other vendors to file suits, even when there is no coverage or a question of coverage under the policy.

NOTE #2: For AOB blogs and more enter “Assignment of Benefits” in the search bar. For every document, study, picture, video, article or piece of evidence I’ve received since jumping on this bandwagon, click the tab above titled “Library” then; choose “Miscellaneous Documents” from the drop down menu. Scroll down to the documents that begin with: “Assignment of Benefits”.

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