Florida is at risk of becoming uninsurable and a special legislative session kicking off Monday in Tallahassee is aimed at averting the potential calamity.
Many homeowners have seen their insurance rates spike, or worse their policies have been canceled.
Weather-related damage has always been a risk in Florida. Costly litigation and attorneys’ fees are also a driving factor behind the crisis.
But the roofing scams appear to the straw that could break the camel’s back.
Several insurance companies have left the Sunshine State and more are in the process of leaving.
“Homeowners insurance options in Florida have become more and more limited, and consumers are facing dire consequences,” said Tasha Carter, Florida’s Insurance Consumer Advocate.
Here’s how the roofing scam works:
• First, roofers canvas neighborhoods and offer inspections to unsuspecting homeowners. These contractors inevitably “find damage” on the roof and often promise a “free roof” to the homeowner, claiming they can have the home insurance deductible waived.
• Homeowners are pressured to sign an assignment of benefits form, giving contractors the right to file an insurance claim on their behalf.
• A claims adjuster from the insurance company inspects the alleged damage. The adjuster either finds no damage or far more minimal damage than the contractor found, and the claim payout is less than what the contractor demanded.
• The contractor brings legal action against the insurance company, demanding a claim payout for the contractor’s original quote. Remember, the homeowner signed the benefits of the policy to the contractor, so the contractor doesn’t need the homeowner’s permission to do this.
• The insurance company now has a choice: it can pay the legal costs to fight the lawsuit or pay the costs to settle out of court. Either way, the insurance company loses money due to the legal action.
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