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Tips to Avoid Scams After a Disaster

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When you’ve just come through a disaster like a hurricane, flood, or wildfire, the last thing you want to worry about is getting scammed. Unfortunately, when people are at their most scared and vulnerable, that’s when scammers try to take advantage. Here are a few things you should know about protecting yourself from scams after a disaster.

Types of scams to watch for

Identity theft

If you get an unsolicited call from someone saying they’re from your insurance company, your mortgage company, or an agency such as FEMA, don’t give out any personal information. Hang up and call that entity directly to verify. Scammers are looking for information like your Social Security number, bank account info, even your insurance policy number and details in order to steal your identity or otherwise cheat you.

Insurance fraud or abuse

Someone may try to convince you to hire them to inspect your home’s damage. Your insurance company will provide an adjustor for free—you don’t have to hire one yourself. Keep in mind that most claims can be handled without the involvement of outside adjustors—or attorneys. Remember to give your insurance company time to settle the claim. In the case of a disaster like a hurricane, they will be dealing with thousands of claims at once. (If you run into problems, you can always hire an outside professional later.)

Charity scams

Maybe you personally weren’t affected by the disaster, and you’d like to help those who have been. Maybe you see an appeal on social media or get an email request for donations. Before you donate, check out the charity to be sure it’s real. Organizations like Charity Navigator, Charity Watch, or Give.org can help vet an organization you’d like to support. If you get an email appeal, be cautious about opening it, and don’t click links from an unknown source.  

Fake government representatives

Agencies like FEMA, HUD, and the U.S. Small Business Association do not charge a fee for helping you apply for disaster aid, or inspecting your home after a disaster. They will not ask for personal info like your Social Security number or bank account information. They also do not endorse individual contractors.

Construction fraud

After a storm or other disaster, you may see construction industry salespeople going door-to-door in an affected neighborhood. While some of these folks are reputable, many are not. Be wary of any contractor who wants to rush you into a contract, wants a large amount of money before starting the job, or who says they can work it so you don’t have to pay your deductible.

If possible, choose a contractor recommended by someone you know and who has a positive reputation in the area. For major jobs, get several written estimates to compare. Lowball bids often are too good to be true. And don’t make your final payment until you’ve inspected the repairs and you’re satisfied with them.

Common sense ways to protect yourself

  • Ask questions. Ask to see ID, ask for references and to see appropriate licenses. Ask if you don’t understand something you’re being asked to sign.
  • Don’t allow yourself to be rushed. Take time to compare bids and read through contracts. A little time spent now can help you avoid a lot of frustration later.
  • Pay with a check or credit card. You’ll have a record of what you pay, and possible recourse if you need to stop payment. And ask for and keep all receipts.
  • If you have questions, contact your insurance agent or your insurance company directly.

Questions about your coverage?

When disaster strikes, the right insurance coverage is essential. If you have questions about your coverage—whether it’s for your home, vehicles, or business—please give L & M Insurance Group a call. Our agency, located in Riverview, Florida, serves the needs of thousands of clients just like you. Our goal is to find insurance coverage tailor-made for you at the most competitive rate. Call us at (813) 672-4100 or contact us online.

For more information on avoiding scams:

Housing Counseling Disaster Recovery Toolkit

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Florida Home and Auto Premiums Are Skyrocketing—Is There Anything You Can Do?

by Posted in Auto Insurance, Homeowners Insurance, News Tagged , , , ,

Almost every day we receive calls or emails from upset clients whose insurance premiums are going up, even when they’ve never made a claim. Some policies are going up by hundreds of dollars per year—what is happening?

The Florida insurance market is in crisis, particularly the homeowners and auto insurance sectors. A perfect storm of factors is contributing to today’s skyrocketing premiums and a market in which it’s getting harder to find insurance at all. In addition to rate increases, insurance companies are pulling out of Florida and tightening their underwriting guidelines. Florida consumers are facing insurance premium sticker shock and are finding it harder and harder to get the insurance coverage they need at a price they can afford.

Why insurance premiums are skyrocketing

As a locally-owned, independent insurance agency, L & M Insurance Group is committed to helping you find insurance that fits your needs and that you can afford. We also want to help you understand the factors contributing to this crisis. Here are the main reasons Florida insurance is seeing such steep increases:

Catastrophic losses. In 2020, Florida insurers lost nearly $1.6 billion dollars, and are reporting even greater losses in 2021. These losses mainly stem from litigation and reinsurance costs (see below), as well as continued payouts for hurricanes Irma and Michael.

Reinsurance costs. It might seem odd that wildfires in California or Australia would affect the price of insurance in Florida, but they can. That’s because disasters all over the world affect the cost of reinsurance for everyone. Reinsurance is “insurance for insurers”—a way for insurance companies to limit the extent of their own losses in case of disaster. The cost of reinsurance has been rising, and experts expect it to continue going up.

Skyrocketing construction and repair expenses. With the price of everything from car parts to lumber going up, it costs more than it did in past years to repair your vehicle or rebuild your house in case of a loss.

In addition, the value of vehicles and homes is also going up, which means in order for you to receive replacement cost in case of a loss, your insurance company will have to pay out more. It follows that if a covered item is worth more, then the cost of insuring it will be more.

Labor shortages are also affecting the price of construction, home, and auto repair. (Read more about how supply chain issues and labor shortages are affecting car insurance premiums.)

Lawsuits and fraud. For years, bad actors have exploited both policyholders and property insurers. Homeowners have been talked into filing claims and lawsuits by third parties like attorneys, contractors, or water remediation firms. Often times, homeowners don’t understand the claims process, or are relieved to have someone else take over. Unfortunately, every insurance consumer in Florida is paying the price for inflated or fraudulent claims and lawsuits.

Florida has, by far, the largest number of lawsuits related to homeowners insurance claims. For instance, in 2019, only 8.15 percent of all homeowners claims in the U.S. were filed in Florida, but more than 76 percent of property claim lawsuits were filed here. And what’s worse: only eight percent of the fifteen billion dollars that property insurance companies paid out in claims costs between 2013 and 2020 went to consumers. Seventy-one percent went to attorneys!

What can you do?

Much of what is happening in the insurance industry is out of individuals’ control, but here are three things you can do:

Review your insurance needs with an L & M Insurance Group agent. We can help you make sure you have the appropriate coverage for your situation, and that you’re taking advantage of all discounts available to you. We can also discuss whether or not an option such as switching to a higher deductible to lower your insurance premium is right for you.

If you have a claim, be sure to contact your insurance agent and/or your insurance company yourself. Do not sign anything without talking to your insurance agent or directly to your insurance company.

Contact your elected officials and tell them that continued insurance reform is still needed. Though recent legislation has helped to reduce assignment of benefits lawsuits, other types of lawsuits are still going up, at a cost to all of us.

We at L & M Insurance Group understand your worries and frustrations about the cost of home and auto insurance. We promise we will do the best we can under these difficult circumstances to provide you with the best coverage at the most cost-effective price. Please call us at 813-672-4100 if you need to discuss your insurance options. If you prefer, you may also contact us online.

Assignment of Benefits Abuse: Everyone Pays

by Posted in Homeowners Insurance, News Tagged , , Leave a comment

Oh no! You’ve just had a leaky pipe flood your bathroom and bedroom. While you’re busy fixing the pipe, mopping up and drying out, along comes a water mitigation company that wants you to sign a contract that allows them to deal directly with your homeowners insurance claim. They make it sound like they’ll handle everything from filing the claim with your insurance company to dealing with all the contractors who will be involved in making repairs to your home—if you sign a contract that contains an Assignment of Benefits clause. This sounds tempting—should you do it?

No, you should not, and here’s why.

Assignment of Benefits (AOB) is a tool that allows a third party to be paid directly by the insurance company for services performed, rather than by the homeowner after making a claim. Unfortunately, in Florida, unscrupulous trial lawyers and shady contractors (many of them unlicensed) have taken advantage of this tool, inflating repair costs and suing insurance companies if they deny the claim or don’t pay it in full. AOB abuse has become so rampant in Florida that’s it’s costing every homeowner money in the form of higher homeowners insurance premiums. According to the Consumer Protection Coalition, since 2000, there has been a 90,000% increase in AOB lawsuits.

Ultimately, this will cost Florida consumers as much as $1 billion dollars in rate hikes, and those rate hikes have already begun. State-run Citizens Property Insurance Corp. asked for a 3.2% increase in rates for all personal lines policyholders in its 2016 rate filing, and CEO and President Barry Gilway told Florida insurance regulators, “I want to be crystal clear on this issue: water losses are the major reason Citizens is seeking rate hikes for the coming year….” (AOB is most commonly used when a homeowner experiences a water-related loss, but the scam is also spreading to the roofing industry.)

Private insurance companies are also raising rates in response, with one large insurer saying it needs a rate increase of 15% statewide to cover the explosion of water loss claims and AOB lawsuits. Private insurers may also begin withdrawing from or eliminating certain zip codes where the abuse is widespread, making homeowners insurance not only more expensive but harder to get.

Florida Assignment of Benefits (AOB)

In addition, often, AOB abuse also leaves homeowners with poor workmanship or incomplete jobs, and because they’ve signed over the rights to their insurance policy, they have no recourse.

If you have a water damage claim, here’s what you should do:

1. Call L & M Insurance Group or your homeowners insurance company.
2. Be leery of unsolicited offers from contractors or other vendors who want to take over dealing with your insurance company for your claim.
3. Carefully read any contracts of service, and look for a clause titled “Assignment of Benefits.” If you see it, don’t sign.

To learn more, visit www.FightFraud.Today.