The tremendous damage from Hurricane Helene, which took over 200 lives and caused billions in property damage, will see homeowners suffer substantial financial losses as their insurance companies seek to reduce or avoid property damage payments.
Another factor raising the odds of widespread fraud is, simply put, Florida.
Florida is the nation’s fraud capital. Florida Governor Ron Desantis has a cozy relationship with insurers, so the administration has shrugged off consumers’ complaints of insurance fraud, as well as fraud related to identity, Medicare, Medicaid, construction, and consumer fraud.
The fraud in the news will be related to hurricane insurance. According to a 60 Minutes Report, homeowners will not recover total damage costs. Home insurance companies can significantly reduce damage claims by altering reports and failing to cover storm damage on roofs and other expensive house structures.
A report by the Merlin Law Group found that “Ron DeSantis and the ‘Friends of Ron DeSantis’ political committee have taken a combined $3.9 million in contributions for insurance industry players—not counting the tidy $125,000 that went to Ron’s 2022 inaugural committee.
“Including their donations to the Republican Party of Florida since January 1st, 2019 (days before DeSantis took his oath of office), campaign money from the insurance industry balloons to more than $9.9 million.”
This is terrible news for anyone who owns a home or is considering buying one in the southeast U.S. hurricane alley, especially Florida, which has a long history of fraud.
As this report shows, homeowners who suffered significant storm damage and dutifully paid hurricane and home insurance premiums for decades never had a chance of being compensated for their property losses due to insurance companies who altered insurance adjuster field reports to show that homeowners should be paid about 80% less than what the adjuster said the repairs would cost.
The hurricane caused widespread damage in Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia.
When the state of Florida was notified of this fraud, they said a fraud investigation against the insurance companies would start, but two years later, nothing has happened.
While the fraud claims against insurance companies will only increase in the next few months as more damage claims are filed from homeowners in the hurricane’s path, there is also a good chance homeowners will never be paid the full amounts of their claims.
In the case of Heritage Insurance, the carrier named in the 60 Minutes report, a licensed adjuster said Heritage Insurance reduced his reports for damages to homes he inspected by up to 80%. It turns out Heritage did this systematically for other claims made by adjusters.
As the 60 Minutes report showed, Heritage paid one homeowner a net amount of $9,000 after the adjuster found that this same homeowner suffered $231.000 in damages. Later, the field adjuster said an office worker eliminated large parts of his report that said the entire roof needed to be replaced. The insurance company said it could be repaired. The insurance company after said it would not pay for any roof damages.
In a lawsuit, field agents said some of their claims were reduced by as much as 98%. In one instance, an adjuster submitted a claim that said the homeowner should be paid $239,000, yet the company only paid the homeowner $3,000.
One attorney said the insurance company wants homeowners to sue if they want their roofs replaced. Since 2021, about six national home insurance companies have exited Florida, while the newer companies that entered the market are altering damage reports and estimates.
Meanwhile, two years after filing a criminal fraud case against Hurricane instance fraud, Florida has not arrested anyone.
Heritage Insurance is very familiar with Desantis. “Two property casualty insurance firms–a subsidiary of Heritage Insurance and People’s Trust Insurance–donated a combined total of $125,000 to DeSantis’s 2023 inaugural celebration, which marked the beginning of his final term as governor in a term-limited state. According to reporting in the Washington Post, both companies participated in the $2 billion ‘taxpayer-financed relief program for property insurers’ that DeSantis signed months earlier in a 2022 special session,” according to the Merlin Law Group.
This close relationship between Desantis and the insurance industry is bad news for the residents of the Florida area’s hardest counties hit by Hurricane Helene. This includes Taylor, Dixie, and Wakulla counties in the Florida panhandle. These are red counties, so seeing how they react when their insurance claims are processed will be interesting.
This should not be a surprise. In Republican Governor Ron DeSantis’ Florida, insurance fraud is another type of business that gets away with in the Sunshine State. Florida is the fraud capital of the U.S., and there is a reason for it: criminals can come to Florida, pay off the right people, and never get prosecuted. DeSantis is a protege of Donald Trump for a reason: both tolerate criminal business practices.
So, if you are considering buying a house in Florida and other Republican-controlled states in the Southeast that have close relationships with state legislatures, think again—caveat emptor.
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