Fraud


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In a significant turn of events in the insurance industry’s fight against Florida assignment of benefits (AOB) abuse, Florida’s Fourth District Court of Appeal (DCA) has ruled that an insurer’s anti-assignment provision was not prohibited.

But the battle isn’t over yet as it is likely this decision will be brought to the Florida Supreme Court.

The Fourth DCA ruling came on Sept. 5, 2018 in the case of Restoration of Port St. Lucie, a/a/o, John and Liza Squitieri v. Ark Royal Insurance Co., in which the court disagreed with a decision by the Fifth DCA in Dec. 2017 prohibiting any such conditions.

The Fourth DCA found that a homeowner’s insurance policy may contain a restriction requiring the consent of all of the insured and the mortgagees before a valid assignment of benefits. The ruling could allow insurers to seek to use these restrictions to stem the rise of fake or exaggerated claims and allow parties with valid, vested interests in a property to have a say in the assignment. The ruling could be a turning point in stemming abuse of AOBs that is leading to increased homeowner insurance rates statewide.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2018/09/20/501785.htm

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Please call Lee from Acentria Insurance at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & Life, Health Group and all financial products.

Flood insurance was far from Stephanie Walker’s mind in 2015 when she moved her family into a home in Fayetteville in central North Carolina, nearly 200 miles (320 km) from the coast.

The next year, a creek at the end of her street swelled during Hurricane Matthew, sending several feet of water into her living room. Without flood insurance, the family spent $70,000 on repairs. The U.S. Federal Emergency Management Agency covered $25,000 but the family had to borrow the rest for her home.

The houses on the street were built in 2005. Matthew was the first storm that caused flooding, but the fear of another flood is causing greater anxiety.

“This street should be demolished. Houses never should have been put here,” said Walker, 41.

After Matthew, the family bought flood insurance and felt protected when the waters touched their doorstep again during Hurricane Florence.

But they are a rarity. Only about 1 percent of homes in North Carolina’s inland counties are insured through the national floodinsurance program, according to federal data, compared with 25 percent to 50 percent of homeowners on the coast.

FEMA’s National Flood Insurance Program supplements regular homeowner policies, which do not generally include flood damage. For homeowners who do not buy the flood insurance, federal aid generally only partially covers repairs.

The average national flood insurance policy, which tops out at $250,000, costs about $700 per year, but varies depending on the elevation of the home, according to FEMA. Homeowners can buy supplemental insurance policies for more valuable homes through private insurers.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2018/09/19/501688.htm

Please call Lee from Acentria Insurance at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & Life, Health Group and all financial products.

The number of Americans with flood insurance is on the rise, yet Hurricane Florence is likely to make it painfully clear that too many homeowners in the Carolinas and other vulnerable regions remain unprotected. .

An analysis of federal flood insurance records by The Associated Press found there were roughly 5.1 million active flood insurance policies in the U.S. as of July 31, up from 4.94 million a year earlier.

The Carolinas had modest gains – a 2.5 percent increase in South Carolina and a 3.5 percent increase in North Carolina.

But large gaps in coverage remain. South Carolina is the second-highest insured state for flooding, with roughly 65 percent of properties in flood hazard areas insured. But in North Carolina, where forecasters say the storm might bring the most destructive round of flooding in state history, flood coverage is less common, with only 35 percent of at-risk properties insured.

After blowing ashore as a hurricane with 90 mph winds, Florence virtually parked itself much of the weekend atop the Carolinas as it pulled warm water from the ocean and hurled it onshore. Storm surges, flash floods and winds scattered destruction widely.

Most of the gains observed in the federal flood insurance data over the past 12 months occurred in Texas, with about 145,000 new policies. Insurance experts say that Hurricane Harvey, which brought tremendous flood damage to Texas and Louisiana late last summer, helped increase public awareness that homeowners need flood insurance.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2018/09/17/501489.htm

Please call Lee from Acentria Insurance at 954-270-7966 for fee quotes on Home Insurance, Car, Flood, Private Flood, Auto, Business & Commercial & Life, Health & group benefits of all types.

Evacuations, already affecting more than 1 million people in and around North Carolina, start the clock ticking on business-interruption insurance policies, which help replace lost income for companies when natural disasters strike. Hartford Financial Services Group Inc. and FM Global are among insurers with exposure in the region that are sending staff to help with anticipated claims.

“You’d have to expect, just based on the forecast, that it’s going to be a significant impact to businesses,” including prolonged disruptions, said Rick Miller, head of the U.S. property practice at Aon Plc. “Certainly businesses that take a direct hit, their facilities could be impacted for months.”

Making matters worse for insurers, forecasters say that Florence may stall over land, potentially dumping rain for days and causing power failures. The storm, expected to make landfall late Thursday or early Friday, may trigger “catastrophic flash flooding,” the National Weather Service said. Companies from agricultural firm Cargill Inc. to carmaker Daimler AG suspended operations in Florence’s path.

Florence could become the most powerful storm to hit the area in more than 60 years if its intensity continues. One estimate pegged the potential total costs of the storm at $30 billion.

Please enjoy the full article below

https://www.insurancejournal.com/news/southeast/2018/09/12/500783.htm

Please call lee from Acentria Insurance at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial and life, Health and group benefits of all kinds.

I know our agency received about 100 calls in just our Fort Lauderdale location on the Day after Labor day before Irma was coming looking for flood Insurance. The fact is we have waiting periods of 10-30 days so last minute is way to lets for the storm so please be prepared.

Last year’s intense hurricane season has motivated most Florida residents to prepare for hurricanes that could hit the state this year, according to a recent survey by the Property Casualty Insurers Association of America (PCI). The results showed a higher percentage of preparedness among Floridians than other hurricane-prone states, but more than 60 percent still say they have not purchased flood insurance.

Nearly two-thirds (64 percent) of residents in Florida say they have taken precautions in advance of the 2018 hurricane season, according to a new poll conducted online by SurveyMonkey on behalf of PCI. More than half of the 654 Florida respondents of the poll, taken between July 9-23, said last year’s hurricanes prompted them to take precautions. Nearly 38 percent reported that their property suffered damage due to last year’s storms.

Among the other hurricane-prone states surveyed in this poll, including Texas, North Carolina, and Louisiana, Floridians reported being the most prepared. Overall poll results of 1,831 residents across Texas, North Carolina, Louisiana, and Florida found 56 percent have not taken any precautions this year in advance of hurricane season. Only 35 percent said that last year’s storms prompted them to take any precautions this year.

Florida is the most hurricane-prone state in the United States, with 40 percent of all United States hurricanes hitting the state, according to the National Oceanic Atomospheric Administration (NOAA). Since 1851, there have been 118 direct hurricane hits in Florida.

“While we’ve not had much activity this hurricane season in the Atlantic basin, the threat of a storm quickly developing is still a possibility. Historically, August and September are active months for hurricanes and as we saw last year with Hurricane Irma it only takes one storm to cause massive amounts of property damage,” said Logan McFaddin, PCI’s Florida regional manager.

The poll included various categories to gauge hurricane readiness, including:

Flood Insurance

  • 63 percent of Floridians do not have flood insurance despite 71 percent saying it’s necessary to help in recovery efforts following a natural disaster
  • 13 percent of residents do not know if their existing homeowners or renters insurance policy covers flood damage

Emergency Plans

  • 68 percent of Florida residents are familiar with their local municipality, county, or state evacuation plan, with the same percentage saying they have developed an emergency plan and shared it with their household
  • 54 percent in Florida have an emergency bag, which includes necessities such as medication, non-perishable food, and water
  • More than half (51 percent) have not conducted a home inventory in the event that property and/or possessions are destroyed, damaged, or lost in a disaster

Financial Preparations

  • 71 percent of Floridians have readily available cash or savings to meet short term expenses that may arise following a natural disaster
  • 69 percent report that they have stored important financial papers and documents in a safe deposit box or online for easy access

Contractor Fraud & Abuse

PCI said following a severe storm it is common for “crooked” contractors to try and take advantage of consumers needing repairs. In Florida, abuse related to water damage and assignment of benefits claims has been a particular problem and the insurance industry and regulators are working to educate policyholders on this escalating abuse.

  • 80 percent are at least somewhat familiar with the signs of contractor fraud and abuse
  • Yet, 14 percent said they would pay upfront for the rebuilding or repair costs if it meant getting their property fixed more quickly and 18 percent aren’t sure if they would
  • 8 percent of residents said they would accept an unsolicited offer from someone to make repairs to their home

Please call Lee at Acentria Insurance for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & Life, Health & all types of group benefits for all size companies.

With Florida about to enter peak hurricane season, a state insurance association representing more than a dozen insurers in Florida is hitting back against a recent report from ratings agency Weiss Ratings that identified 10 Florida-based insurers as “weak.”

The insurer trade group, the Florida Property & Casualty Association (FPCA), is disputing the “weak” assessments by Weiss and defending the marketplace in general, saying it does not believe Weiss is a legitimate ratings agency

“Florida homeowners should beware of a recent press release by Weiss Ratings that contains misleading information about the financial stability of our state’s homeowner’s insurance companies. This is simply not the truth,” the Florida Property & Casualty Association (FPCA) said in a statement.

State insurance officials did not respond to individual ratings assertions by Weiss but did downplay the effect of open Hurricane Irma claims that Weiss cites as a concern.

Weiss Ratings has defended its assessments of the 10 insurers as weak, claiming other rating agencies give some insurers high ratings they don’t deserve.

In the June 14 press release that upset FPCA, Weiss highlighted what it called the 10 strongest and weakest providers of homeowners insurance doing business in Florida.

The ratings agency, which analyzes and rates 2,300 property and casualty insurers in the United States, said it uses annual and quarterly financial statements filed with state insurance commissioners to complete an analysis of hundreds of factors that are synthesized into a series of indexes that are then used to arrive at a company’s letter grade rating.

Based on this criteria, Weiss’s statement identified 10 carriers with more than $2.5 million in annual homeowners premiums in the state to which it gave a grade of D+ or lower, as of Dec. 31, 2017:

Florida Homeowner Insurers Weiss
Safety Rating
Homeowner Premiums
$ Millions
Anchor P&C Insurance Co. D 53.7
Edison Insurance Co. D+ 68.2
Florida Specialty Insurance Co D 75.8
Olympus Insurance Co. D+ 121.5
People’s Trust Insurance Co. D+ 212.2
Prepared Insurance Co. D 51.5
Tower Hill Preferred Insurance Co. D 104.2
Tower Hill Prime Insurance Co. D 220.1
Universal P&C Insurance Co. D 846.1
White Pine Insurance Co. D+ 6.8

Weiss warned consumers to remain vigilant of these 10 insurers with “weaker finances,” which combined have more than $1.7 billion in homeowners premium in Florida.

FPCA, which represents 15 Florida insurers, including Edison Insurance and People’s Trust, disputed the Weiss ratings, saying in its release that Florida home insurers must pass a rigorous catastrophe reinsurance stress test by the Florida Office of Insurance Regulation (OIR), as well as vertical and horizontal reinsurance reviews by what it calls “credible rating agencies.”

FPCA alleges that Weiss Ratings opinions are “not recognized by the insurance industry because they fail to consider the rigorous reinsurance programs purchased by insurance carriers on an annual basis,” FPCA said.

“Our leadership of and members of the FPCA do not believe Weiss is a legitimate ratings agency. To the best of our knowledge, their ratings aren’t recognized by the secondary mortgage market and they don’t speak with the insurance companies they claim to rate. A.M. Best, S&P, Moody’s and Demotech all do,” said FPCA Chairman Roger Desjadon.

Each of the top 10 companies Weiss assigned low ratings to have Financial Stability Ratings (FSR) of ‘A’ or better by Ohio-based financial analysis firm Demotech, except one – White Pine Insurance Co., which is rated B+ by A.M. Best only. In addition to its ‘A’ rating from Demotech, Tower Hill Prime Insurance Co. also carries an A- rating from Best with a negative ratings implication, as of Sept. 2017. Best does not rate the other eight companies.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2018/07/24/495836.htm

Please call Lee from Acentria Insurance at 954-270-7966 for free quotes on Home Insurance, Auto, Flood, Private Flood, Car, Business & Commercial & Life, Health & all group products.

“I think the number one thing the insurance industry can do is link AOB (assignment of benefits) to the impact that it’s having on the individual consumer and the huge impact it’s having on the premiums that the consumer’s paying,” Barry Gilway, president, CEO and executive director of Citizens Property Insurance Corp. told attendees in a recent Insurance Journal webinar on Florida AOB abuse

Education, education, education, Gilway said, will be critical to slowing the Florida AOB epidemic that is leading to higher insurance rates, reduced coverage and a potential insurance market crisis in the state.

Gilway was one of a panel of four experts participating in the “Florida AOB Crisis: Where Does the Industry Go from Here?” webinar conducted by Insurance Journal on June 26.

Logan McFaddin, regional representative for the Property Casualty Insurers Association (PCI), Paul Huszar, CEO of remediation contracting company VetCor, and Patrick Wraight, director of the Insurance Journal Academy of Insurance, joined Gilway in discussing the AOB situation in Florida and ways to rein in what they all agreed is runaway abuse.

The AOB problem in Florida stems from unlicensed water remediation and roofing contractors who have homeowners sign over their insurance policy rights in exchange for needed repairs to their homes. The contractors, typically working with an attorney, file inflated or fake claims, and then pursue lawsuits against insurers when those claims are disputed or denied. Because of Florida’s one-way attorney fee statute, insurers are left footing the bill for the inflated claims and the attorney fees if the insurer is found to have underpaid the claim by any amount.

Carriers across the state have seen an increase in litigation because of these inflated claims. According to the Florida Department of Financial Services, there were 405 AOB lawsuits across all 67 Florida counties in 2006, and by 2016 that number had risen to 28,200.

But Citizens, the state-run insurer of last resort, has borne the brunt of the abuse. It reported in its 2019 rate hearing in June that it would spend $70 million this year defending AOB-related litigation – equal to 17 percent of its total premium.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2018/07/19/495520.htm

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