Douglas Quinn is the President of the American Policyholder Association (APA.). He was in Orlando last Saturday afternoon. The meeting was somewhat impromptu and had a number of leaders from the National Association of Public Insurance Adjusters.
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“We hope this sentence sends a message that this conduct will not be tolerated in our county.”
—Matt Smid, Tarrant County Assistant Criminal District Attorney
According to the Tarrant County district attorney’s office, a Tarrant County judge sentenced Richard Livesay to five years in prison after he pled guilty to various charges including fraud and barratry for filing fraudulent hail claim lawsuits. Livesay reportedly would have received more than $300,000 had his fraudulent scheme not been uncovered.
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Chubb Corporation has a good reputation in the insurance industry for fairly handling claims and paying insureds what they are owed. Chubb fell victim to an overzealous adjuster, Dennis Sorge, who was colluding with a contractor he hired to estimate repair costs. The contractor, Paul H. Mertz Jr., would inflate the estimates and then Sorge steered the repair work back to the Mertz. After a 40-day trial, Judge Nelson S. Roman entered a judgment of nearly $12.3 million against Mertz and Sorge. The judgment was suspended only as to Sorge due to bankruptcy issues. Mertz was also ordered to pay Chubb’s costs and attorney fees.
William David Rodeffer III of Folkston, Georgia, was arrested for collecting $40,000 in insurance premium payments from two clients for nearly three years for insurance policies that were never purchased. Claims Journal reported today about the arrest and listed their source as the Florida Department of Financial Services.
Nestled right on the Delaware River in New Hope, Pennsylvania, is the historic Bucks County Playhouse. The original structure dates back to 1790 and is was formally a grist mill.1 While the theater and its stage have seen some of entertainment’s biggest stars, including Robert Redford, Angela Lansbury, and Dick Van Dyke, its name is in the paper these days for another reason: insurance fraud.
Ed Rust must have muttered, "you’ve got to be kidding," after learning that a McKinsey & Company consultant and State Farm employee were accused of siphoning about $900,000 in consulting fees and expenses.
When a policyholder disputes a property damage claim, insurance company representatives often dig in their heels and try to stand firm on the denial or the low valuation. Insurance companies frequently allege various unsupported reasons and defenses to avoid paying what is due. Some insurance companies accuse consumers of insurance fraud even when the facts don’t support an allegation under Florida’s law. Does this mean that insurance fraud doesn’t happen? Absolutely not. Fraud is a real and there is a need for Florida’s fraud task force to handle actual insurance fraud, but a very small number of the insurance fraud reported to the State of Florida relates to property damage claims.
Policyholders and their agents need to make certain that an application for insurance coverage has the correct answers and information. While some states require the intent of fraud in the application to rescind coverage, many states merely require materially wrong information to void an otherwise valid claim. Indeed, in Florida, even an unintentionally wrong answer which results in a higher premium charge can be the basis for denying an otherwise valid claim, even though the wrong information and the loss have no relationship at all.
My wife and I spent a very pleasurable weekend in Dallas as guests of Charles and Tracey Shreves. They operate the Spink Shreves Auction Galleries and held an informal gathering of serious stamp collectors from across America. I enjoyed viewing some amazing private collections.
“Don’t complain about the snow on your neighbor’s roof when your own doorstep is unclean.”
Confuscious
Policyholders guilty of insurance fraud need to be held accountable and pay a penalty. Who disagrees with that?
