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Sha'Ron James

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Contractor cons raising home premiums in South Florida


Date: June 22, 2017
Source: Coalition Against Insurance Fraud


June 22, 2017, Palm Beach, FL — Don't be surprised to see a spike in your property insurance rates.

Citizens Insurance, the state-run insurer of last resort, wants to raise premiums an average of 9.3 percent in Palm Beach County, and private companies are expected to follow suit, if they have not already.

The Citizens Board of Governors approved the recommended rates this week. Even larger hikes of 10.4 and 10.5 percent were approved for Broward and Miami-Dade Counties, respectively.

State wide, the average recommended increase is 5.3 percent, but state regulators must still approve the hikes.

In a release, Citizens blamed the sought-after rate increases on "nonweather-related water losses, assignment of benefits abuses and out-of-control litigation."

Citizens, in earlier statements, pointed to a skyrocketing number of nonweather-related water claims in recent years. These events include burst pipes, sudden dishwasher leaks or leaks in the roof.

"Some of those are legitimate claims, some of those are fraudulent claims," said Robert Norberg, a veteran agent with Arden Insurance in Lantana.

Norberg said fraud often takes place during so-called "assignment of benefits"-- when a policyholder assigns their rights to a claim to a third-party, such as a contractor.

"So they're taking these $3,000 and $4,000 claims and turning them into $30,000 and $40,000 claims," Norberg said.

Legislation aimed at addressing water claims fraud issues failed to pass during the recent session in Tallahassee.

CBS12 reached out to the chair of the State Senate Banking and Insurance Committee, Senator Anitere Flores, of Miami. An assistant in the Senator's office fielded our request for comment.

Norberg said absent changes in the law, "they have no way to recoup those losses, except pass that through, try to pass it through, to the consumer."

Norberg said insurers are already changing policies, limiting coverage amounts.

"It is going way up on everybody east of 95," said Luis Carvajal, a homeowner in Lake Worth.

"There's always going to be fraud somewhere," Carvajal said. "It's the price, I guess, we pay for living here in paradise."

Carvajal said he recently hired a contractor to add straps and nails to his roof. He also had hurricane windows installed.

The upgrades cut his premium nearly 40 percent, Carvajal said.