Consumer eViews

Volume 2, Number 8, February 21, 2005    

Last week I joined two key lawmakers in support of legislation to require insurance companies to clearly outline what is covered in homeowners insurance policies. The consumer protection bill is being sponsored by Sen. Rudy Garcia, of Hialeah, and Rep. Joe Negron, of Stuart.  The measure calls for insurers to spell out hurricane deductibles available to homeowners and the financial consequences of each choice. Homeowners would get the option to purchase a standard homeowners insurance policy, much like the basic and standard health insurance plans offered in Florida.   

The recent hurricanes were devastating personally and financially for many Floridians. Thousands have told us they did not realize how much their insurance policies required them to pay in a high deductible as well as for property they thought was covered.  We need to do everything we can to make sure homeowners insurance policies are easy to understand, clearly outline coverage and disclose what the policyholder is financially responsible for in the event of a storm.

Sen. Garcia called the legislation just plain common sense and spoke of the need to take the often confusing language in insurance policies and make it clear and understandable.  

Rep. Negron agreed and stated that if people are required to buy insurance, they deserve to know and understand what protections are in their policies, and these items need to be outlined in a plain and simple manner. 

The legislation would require:

  • Insurers to offer a standard “apples to apples” policy.
  • Insurance policies to include a checklist of household and personal items that are covered.
  • Disclosure of all exclusions and limitations.
  • Policies to clearly spell out cancellation and renewal rules.
  • Policies to disclose the actual costs of hurricane deductibles and how each deductible affects premium costs.

The bill calls for the creation of an advisory committee that would file recommendations for the standard policy language by January 1, 2006.      

My best,           

                      -- Tom Gallagher


Announcement follows the arrests of members of a staged accident ring  

Florida’s Chief Financial Officer Tom Gallagher unveiled plans for the newest phase of an ongoing public education campaign aimed at ensuring those who might participate in staged accidents and auto insurance fraud know that the consequences include time in prison and driver license revocation. 

He revealed the campaign plans following the arrests of 22 of 39 individuals in Miami believed to have been involved in a ring that staged at least a dozen auto crashes and fraudulently billed insurance companies for $1 million.  Twenty-five members, if convicted, will face a minimum mandatory sentence of two years in prison for organizing the staged crashes, and up to 15 years in prison on all charges. 

“These individuals staged car crashes and faked injuries,” said Gallagher, who oversees the Department of Financial Services.  “But the costs are very real – hundreds of dollars in additional costs each year on the backs of Florida families.” 

In the last five years, the Department of Financial Services, Division of Insurance Fraud, has arrested more than 800 people in connection with at least $23 million in Personal Injury Protection insurance fraud.  Florida drivers are required to carry a minimum of $10,000 in PIP coverage and $10,000 property damage coverage.  By staging accidents, the planners and participants, usually in connection with unscrupulous clinic owners, target the PIP insurance of drivers, and fraudulently bill auto insurance companies for injuries and treatments that never happened.   

Gallagher is promoting legislation to address the latest spin on PIP fraud – accidents that never happen.  The legislation would establish a two-year mandatory sentence for accidents that happen only on paper or single-car accidents reported as hit-and-runs. 

Today’s arrests are the culmination of a six-month investigation by the department, the special investigative units of the insurance companies and the National Insurance Crime Bureau.  Florida’s PIP prosecutor Nina Vivenzio, of the Dade County State Attorney’s Office, is prosecuting the charges.

The 53-year-old suspected ringleader Wilfred Cyriaque, also known as “Lopez” or "Blanc," of 1120 NW 111 St., Miami, is charged with 51 counts each of insurance fraud and grand theft, four counts of staging an accident, and organized scheme to defraud.  Investigators believe Cyriaque may have staged as many as 90 crashes during the last several years.   

Cyriaque and 24 participants have been charged under a new law designed to combat staged accidents, which took effect October 1, 2003.  State fraud investigators have now arrested more than 40 individuals under the new law and, in Miami alone, are actively investigating more than 50 other fake crashes believed to have occurred since October 2003.   

Omar Lantigua-Gonzalez, the first person convicted under the new mandatory sentencing law, was sentenced last September to two years in state prison.  In what is known as the Hialeah Hummer case, he used a Humvee to damage several vehicles that he and other participants later said had been struck in a hit-and-run incident. And last Tuesday, six of seven alleged members of another staged accident ring in Miami were arrested.

“The pace of these crimes is staggering,” Gallagher said.  “We are very grateful for the two-year minimum sentencing law and our dedicated prosecutor. Together, they are having a significant impact.” 

Vivenzio, the state’s first dedicated PIP fraud prosecutor, began in March 2004.  PIP fraud-related arrests – based on charges filed by Vivenzio – increased 25 percent in 2004 over 2003, from 155 to 201, and convictions and jail time also were up.   

“The tools to fight this crime should be as strong as possible, and I appreciate the work the Legislature has done to enact minimum mandatory sentences,” Vivenzio said.  “The more aware the public is of these minimum mandatory sentences, the more likely would-be perpetrators will take notice.” 

Vivenzio’s position is funded by the Florida Automobile Joint Underwriting Association, who is also sponsoring the department’s public education campaign along with the Florida Insurance Education Foundation, a Tallahassee-based organization. 

The information cards and posters, also available in Spanish, will be distributed to police stations in Miami, Miami-Dade and Hialeah, insurance agent offices, auto tag agencies, community colleges, traffic schools, retail outlets, community centers, churches and numerous state and county offices. The message will be bolstered by public presentations at traffic schools, community centers, churches and government organizations.

The Division of Insurance Fraud was assisted in making arrests by Miami-Dade Police RID, Hialeah Police Department, North Miami Police Department and the Department of Corrections.  The following insurance companies also assisted: include Allstate, Bristol West, Budget, Direct General, Federated National, First Liberty (Liberty Mutual), FAJUA (Illinois National – AIG), Ocean Harbor, Progressive, Republic Western, Southern Group, State Farm and US Security.


The Division of Insurance Fraud has arrested the following so far for participating in this staged accident ring. (* Means the crash occurred after the mandatory minimum sentence law took effect.) 

Staged accident 03/19/03 - Fraudulent claims in excess of $60,000: 
Claudie Fede, 33, 145 NE 135 Street, North Miami           

Staged accident 05/07/03 - Fraudulent claims in excess of $261,000:         
Calvin Naylor, 23, 1951 NE 167 Street, #12, North Miami Beach     

Staged accident 07/17/03 - Fraudulent claims in excess of  $51,000:
Denise Jean-Baptiste, 30, 8910 N Miami Avenue, Miami
Katherine Pierre, 20, 1355 NE 129 Street, North Miami           

Staged Accident 08/03/03 - Fraudulent claims in excess of  $123,000
Evelyn Cajuste, 22, 1951 NE 167 Street, #12, North Miami Beach
Calvin Naylor, 23, 1951 NE 167 Street, #12, North Miami Beach 

Staged Accident 09/03/03 - Fraudulent claims in excess of  $18,000
Jean-Berthony Ductan, 23, 17400 NE 1 Avenue, North Miami Beach 

Staged Accident 09/10/03 - Fraudulent claims in excess of  $21,000
Mito Moline, 23, 12135 NW 21 Court, North Miami
Marie Ann Padgett, 59, 1123 NW 116 Street, North Miami 

* Staged Accident 10/06/03 - Fraudulent claims in excess of  $64,000
Jude Balthazar, 28, 1150 NE 141 Street, North Miami           

* Staged Accident 11/01/03 - Fraudulent claims in excess of  $231,000
David Bonhomme, 28, 13925 NE 6 Avenue, #308, North Miami
Adelus Medee, 51, 240 N Biscayne River Drive, Miami
Mita Nercier, 20, 240 N Biscayne River Drive, Miami
Orecia Nercier, 51, 240 N Biscayne River Drive, Miami 

* Staged Accident 11/22/03 - Fraudulent claims in excess of  $29,000
Raymonde Belizaire, 43, 1250 NE 130 Street, North Miami
Junior Cime, 20, 522 NW 107 Street, #2, Miami
Luidgi Daoud, 21, 905 NE 129 Street, North Miami
Cassandra Louis, 21, 1250 NE 130 Street, North Miami 

* Staged Accident 12/07/03 - Fraudulent claims in excess of  $64,000
Andre Destave, 20, 6820 NE 5 Avenue, Miami                      

* Staged Accident 12/16/03 - Fraudulent claims in excess of  $38,000
Willbenz Durosier, 21, 5234 NW 4 Avenue, Miami
Maximillan McCray, 22, 800 NW 28 Street, Miami
Agatange Remy, 20, 440 NW 94 Street, Miami 

These participants were previously arrested in 2004 for a staged accident on 08/10/03 with fraudulent claims in excess of  $40,000:

Verrill Coleman, 25, 19230 NW 5 Court, Miami
Patryck Holliday, 23, 1701 NW 59 Street, Miami
Dominique Augustin, 43, 125 NW 121 Street, Miami
Evelyn Cajuste, 22, 1951 NE 167 Street, #12, North Miami Beach
Calvin Naylor, 23, 1951 NE 167 Street, #12, North Miami Beach 

The clinics used included: 

El Portal Medical Center, 8642 NE 2 Avenue, El Portal
Mia Higginbotham, DC, 1590 NE 162 Street, #400, North Miami Beach (Arrested for insurance fraud on 10/21/04)
Yugues Schettini, DC, 8051 NE 2 Avenue, Miami
North Miami Medical Group, 16401 NW 2 Avenue, #100, North Miami Beach
All Care Health and Wellness Center, 2230 NE 123 Street, North Miami
South Florida Pain and Rehabilitation, 18339 NE 18 Avenue, North Miami Beach
Sante Medical Services, 8030 NE 5 Avenue, Miami


Chief Financial Officer Tom Gallagher, representing the Governor, helped present the Citizen of the Year award from the Tampa Metro Civitan Club during the annual Governor's Luncheon at the Florida State Fair.

Noted surgeon and humanitarian Sylvia Campbell was surprised by the honor.  A Tampa native, Campbell is board president of the Judeo Christian Health Clinic,  which operates with volunteers and gives about 14,000 patients a year access to physicians, pharmacists and nurses. Dr. Campbell has made 14 trips to Haiti to help residents of the poorest country in the Western Hemisphere. She is a respected asset in the Tampa community.

The Civitan award, which honors Tampa volunteers, dates to 1927. The list of recipients includes Peter O. Knight Sr., Ernest Maas Sr., Howard P. McFarlane, Howard Frankland, Chester Ferguson, Bob Thomas, H.L. Culbreath.

Recent winners include attorney Reece Smith, auto dealer Jim Ferman Jr., minister and former coach Abe Brown, child advocates Ann Murphey and Liz Kennedy, Yankees owner George Steinbrenner, brothers Leonard and George Levy, tire king Olin Mott and developer Al Austin.



Florida’s Chief Financial Officer Tom Gallagher has announced he will be hosting town hall meetings in hurricane-ravaged areas, with the first meeting tentatively scheduled in Pensacola on Wednesday, March 2, 2005.  Gallagher said he is going to talk with storm victims in the Panhandle first because that is where the largest percentage of storm claims are still unresolved.

In addition to Pensacola, town hall meetings will be scheduled in early March in the following communities:  Port Charlotte, Orlando and Melbourne.  Details on dates, locations and times will follow in the coming week.

“If Floridians are still having problems with their insurance companies, I want to hear from them personally,” said Gallagher. “My focus is to direct all available resources to helping storm victims who are eager to rebuild their homes and their lives.”

The town hall meetings will be scheduled outside of working hours to ensure storm victims will be able to attend, and teams of consumer specialists will be on-hand to help policyholders one-on-one. 

For more information, interested consumers can contact 1-800-22-STORM.


Florida’s Chief Financial Officer Tom Gallagher warned Floridians who were hit with multiple hurricane deductibles during last year’s hurricane season that the deadline to apply for relief is just a week away.  Under the law the state legislature passed in December establishing the program, no applications can be accepted after March 1, 2005. 

The program was created to avoid the terrible economic consequences Florida faced if people who were struggling to pay multiple hurricane deductibles were unable to repair or rebuild their homes.  The Legislature also accepted Gallagher’s proposal to limit hurricane deductibles to one per year for future hurricane seasons.

“If policyholders were subject to more than a single, full deductible they should have received an application from their insurance company,” said Gallagher.  “If they have not received anything, they should call their insurer immediately.  Also, they should call our department at 1-800-22-STORM to request an application package, or they can download one at  The bottom line,” said Gallagher, “is that if you believe you are eligible you must file an application or you cannot be considered for reimbursement.”

Floridians eligible for the program include homeowners, renters, mobile homeowners, manufactured homeowners, cooperative unit owners, apartment house owners and homeowners and condominium associations who paid one full deductible for hurricane losses and also incurred deductible losses from a second, third or even a fourth hurricane. 

Individuals may apply for reimbursement of the amount of the deductible they were assessed in excess of their first deductible, capped at $10,000 for damage caused by two hurricanes or $20,000 for damage caused by three or more hurricanes during the 2004 hurricane season. Condominium associations can recover a maximum of $3,000 per unit that did not have insurance for assessments.   Any policyholder who paid more than one full deductible also may be eligible for relief.  Applicants must have documentation from their insurance providers to verify that more than one hurricane claim was filed.

Reimbursements will be reduced by $100 to the total reimbursable amount for each claim filed after the first storm claim; and by any funds received as a grant to cover the deductible through federal, state, county, or municipal programs.


Florida Insurance Commissioner Kevin McCarty announced that 91 insurance companies were assessed fines totaling more than $1.1 million for filing late affidavits stemming from Tropical Storm Bonnie and Hurricanes Charley, Frances, Ivan and Jeanne.
“These companies were given an appropriate time period to submit the required affidavits based on these devastating hurricanes and they have failed to do so,” said Commissioner McCarty. “These fines are representative of the importance of timely filing.”
The companies were found in violation of Emergency Rule #69OER04-19 Claims Adjustment Requirements. The Emergency Rule required all property and casualty insurers with direct personal lines residential property claims in Florida resulting from Hurricanes Charley, Frances, Ivan, Jeanne, and Tropical Storm Bonnie to expeditiously settle claims and furnish an Affidavit attesting to their compliance with the Emergency Rule.
The rule stipulated that policyholders entitled to additional living expenses will have been provided advanced funds, all damage will have been evaluated and assessed, and a good faith and reasonable effort will have been made to settle all claims or earnest negotiations toward settlement of disputed claims will have begun.  
Under Florida law, any insurer in noncompliance with the reporting deadlines would be assessed an administrative fine of $2,500.00 for each day the affidavit has not been received by the Office.
This announcement follows a comprehensive review of the affidavits submitted by the industry to the Florida Office of Insurance Regulation.

Consumer Services HelpLine
(800) 342-2762.