LEE COUNTY, Fla. — Southwest Florida homeowners say hundreds of public adjusters and contractors have been knocking on their doors asking to help with insurance claims after Hurricane Ian.
The Insurance Information Institute said natural disasters like this attract scammers looking to take advantage of people when they're most vulnerable.
“They're out here like vultures, you know, and they are taking advantage of everybody,” Cape Coral Homeowner Ron Scalzo told ABC Action News.
“As you can see, we've got a lot of wind damage because the eye of the storm ran right parallel to us,” he said, showing us the tree debris lining his street.
As soon as the hurricane passed, he went outside to start cleaning the debris in his neighborhood.
“The most disturbing thing was within half an hour of us just starting to clean up to get to our cars, we had 40, 50 public adjusters running through the neighborhood talking about how they could do our claims for us… they could handle it for us, it’s what they do," he said.
To homeowners in a time of distress, it sounds like a good idea, but Scalzo knew better because he’s the COO of Flagler Insurance agency.
“I said, ‘I'm a licensed adjuster. I'm an insurance agent. I don't need any help, we just call the carrier and they'll take care of the claim,’ and they said, ‘Oh no, that's not how it works.’ I said, ‘What do you mean that's not how it works?’ ‘No, you have to know how to navigate through this because the carrier's not going to want to pay you,’” Scalzo described one of the conversations he had hours after the hurricane.
Scalzo said he knows at least 15 people who agreed to sign with these door knockers — either a public adjuster who will adjust their claim for a percentage of the payout or an assignment of benefits (AOB) — allowing a third party, often a roofer, to take over with the insurance company.
According to the Florida Office of Insurance Regulation, the abuse of AOBs has fueled runaway litigation, putting millions of dollars from insurance companies into the pockets of roofers and their attorneys.
“They were going through here like it was Halloween, and they were trick or treating,” Scalzo exclaimed. “We probably had 40, 60 within an hour coming through here, and then they continue to just keep coming in over days and days.”
As many are facing some of the hardest weeks of their lives, Florida’s Chief Financial Officer Jimmy Patronis told residents on October 6 to beware of scammers waiting to take advantage.
“The bad actors will be high-pressure salesmen going door to door trying to coerce you to sign documents. Never sign anything,” Patronis said in a press release video.
“Our advice always is don't even answer your door,” said Mark Friedlander, spokesperson for the Insurance Information Institute.
He adds that this happens after every natural disaster, and it won’t change until the laws do.
“We're hoping, at some point, the legislature will take strong enough action to basically ban AOBs because all they are, are roadmaps for fraud,” Friedlander said. “Many states have banned them or greatly restricted them. Florida is still very open season when it comes to AOBs, and it is the first step towards being scammed by a contractor.”
The institute also predicts $10-20 billion in lawsuits against insurance companies to come out of Hurricane Ian.
Florida Association of Insurance Agents (FAIA) also warns that not only will a third party slow down a payout, but homeowners will lose money as well.
“Public adjusters are paid, you know, as a portion of the claim, so after a catastrophe, their fees are limited to 10% of the claim,” explained Kyle Ulrich, President and CEO for FAIA. “But, if a customer signs an agreement with a public adjuster now before giving their insurance company the opportunity to adjust the claim, they're giving away 10% of their claim for no reason whatsoever."
In Florida, you have 10 days to rescind signing a public adjuster and 14 days to rescind an assignment of benefits to make sure no one gets paid out from your loss.
“I think they take advantage of people because they’re completely lost,” Scalzo concluded.
Insurance fraud costs each Florida family an additional $1,500 a year in increased premiums, according to the CFO’s office.
Here are a few important tips to avoid falling victim:
- Always call your insurance agent before signing anything
- Verify anyone you hire has a valid license by asking for information and searching it on this site.
- If you have any questions or concerns, call 1-877-MY-FL-CFO (1-877-693-5236)