It’s no joke: Florida homeowners pay the highest homeowners insurance premiums in the nation. Much of this is due to property insurance fraud – specifically, fraudulent roof repair schemes resulting lawsuits, which are causing significant disruption to the homeowners insurance market in Florida.
Florida a Hotbed for Fraud
The Sunshine State, it turns out, is fertile ground for a wide array of fraudulent activities. Identity theft, check washing, auto and healthcare insurance fraud, as well as property insurance fraud all thrive here. Several factors contribute to Florida's notoriety for fraud. These include a large and diverse population who may be more vulnerable to scams, and a booming real estate market, which can attract dishonest dealings. The transient nature of Florida’s population creates opportunities for fraudsters to operate and disappear with ease.
Impact of Fraud on Insurance Premiums
It’s a simple fact: Insurance fraud leads to higher insurance premiums for everyone. As insurers incur financial losses due to fraudulent claims, the loss is offset by increasing premiums across the board. This means honest homeowners like you end up bearing the high cost of fraud.
In the first half of 2023, there were more than 3,000 complaints of potential insurance fraud reported to state authorities. The financial implications of this fraud are staggering. Insurance fraud costs the industry an estimated $40 billion annually, according to the FBI – increasing premiums for the average American family by up to $700 per year.
By reporting suspicious activities and supporting measures to detect and prevent property insurance fraud, we can collectively work toward stabilizing insurance premiums and ensuring a fair and equitable insurance marketplace for all.
Who Investigates Insurance Fraud?
The state’s Department of Financial Services (DFS) is tasked with fighting fraud in Florida. Since 2017, when Jimmy Patronis began leading the department as Florida’s Chief Financial Officer, 5,000 arrests have been made for alleged fraud, arson, and the misuse of state funds, according to the DFS website.
Fraud Free Florida is the DFS site dedicated to the state’s fraud-fighting efforts. This is where you can learn about the latest scams, report suspected fraud, and earn up to $25,000 in rewards for tips leading to convictions.
"Crimes like insurance fraud, workers' compensation fraud, arson and theft/misuse of state funds increase your insurance and other costs. Help us find and stop criminals who try to take advantage of the system."
~ Florida DFS, Division of Investigative & Forensic Services
In addition, insurers also have their own fraud investigation units to root out potential fraud among the many claims they receive. This includes government-run Citizens Property Insurance Corporation, currently the largest home insurer in the state.
What’s Being Done to Combat Property Insurance Fraud
Property insurance fraud is being battled from many different angles in Florida.
Laws and regulations are being passed, making it harder to commit – and easier to prosecute – some of the most common fraud schemes. This includes prohibiting the assignment of benefits (AOBs), which has led to much abuse by unscrupulous contractors. With this and other recent legislation, insurers will minimize frivolous lawsuits by contractors and scam artists looking to make a quick buck.
Resources, in terms of additional people and finances, are being provided to agencies and programs to help prevent and investigate insurance fraud – as well as to help strengthen homes to better withstand future hurricanes and tropical storms. This includes designating additional funding for public education campaigns, increasing the financial incentives for reporting fraud, and beefing up state investigative resources. It also includes opening up the My Safe Florida Home program to more homeowners.
How to Report Fraud
Just like with other crimes, if you see something – say something. No one wants to be complicit in fraud. Call the Florida Department of Financial Services at:
Insurance Fraud Hotline: (800) 378-0445
You could also submit a report online at www.fraudfreeflorida.com.
Got a Fraud Tip? $25,000 in Rewards Are Available
If your report of suspected fraud results in an arrest and conviction, you could be eligible for up to $25,000 in fraud-fighting reward money.
Stop Insurance Fraud in Its Tracks: Your Report Matters
By reporting property insurance fraud, you can help ensure the home insurance marketplace in Florida remains fair, affordable, and sustainable for everyone. Report fraud now by calling the state’s insurance fraud hotline at (800) 378-0445 or submitting your report online at www.fraudfreeflorida.com.
Here at Edison Insurance Company, we are committed to fostering a culture of integrity and vigilance. Our Special Investigations Unit works tirelessly to investigate reports of fraud, ensuring our policyholders receive the protection they deserve without the inflated costs of fraud. Together, we can build a stronger, more secure insurance community. If you suspect fraud on an Edison Insurance policy, call us at (866) 923-2920 or email us at reportfraud@edisoninsurance.com right away.
To find out more about what you can do to combat property insurance fraud, read our blogs on this and related topics. You can also contact your agent for advice or to update your homeowners policy. If you’re not currently insured by Edison Insurance Company get started now with an online quote.
