This very old story, from JS contributor, Barry Zalma, recently caught my eye. Perhaps it’s because I believe Florida is the American epicenter for insurance fraud. Maybe it’s because I’m currently retained as an expert witness in a RICO case filed by one fed-up insurer against an alleged fraudster. Maybe it’s because I think insurers, property insurers in particular, should exhaust more options going after law breakers before just paying obviously fraudulent claims to save money short term. Please note, I understand it’s a formulaic process. I’m suggesting that sometimes the formula may be flawed and the decision myopic.
I also understand that recent reforms are helping in Florida–litigation is way down and property rates are likewise trending. But… attempts to defraud still linger.
In Zalma’s intriguing non-homeowners saga, the investigation costs, court costs, expert witness fees and attorneys’ fees exceeded half a million dollars. But the insurer defeated a one-million-dollar claim, including fifty million in punitive damages. Word went out: “This insurance company fights!” And that truth stymied additional fraudulent claims against all insurers.