Strems’ cohort loses court bid
Insurance Fraud by Nick Youngson CC BY-SA 3.0 Alpha Stock Images
I had the privilege last week of speaking to the Florida Housing Coalition, a group of stakeholders involved in workforce housing across the state. Developers, Realtors®, landowners, and many others listened and discussed the sad state of our property insurance market and they asked some very insightful questions. We talked rates and why they were going up. One of the reasons is the almost 90,000 property insurance lawsuits currently in Florida courts. There are many who believe that a lot of these cases have no basis in fact. Others believe that every one of them is legitimate. It is really up to the courts to decide although many of them don’t make it to the courtroom because often the strategy is to file the case and hope it will settle, with those bringing the cases receiving, in some cases in our opinion, enormous portions of the settlement.
Those attending the webinar were shocked at the rate increases they are seeing as this directly affects residents in multi-family workforce housing by raising the cost of rent as rates go up. It is no secret that increases in claims and litigation drive insurance rates and we can only hope that our legislature recognizes this. I’m happy to share more so please contact me for further discussion.
OPPAGA Homeowner & Auto Glass Insurance Fraud Report: A report released last week by the Office of Program Policy Analysis and Government Accountability (OPPAGA), which is Florida’s version of the federal GAO, looks at homeowners and automobile insurance fraud and unlicensed activity. The report shows that homeowners insurance fraud referrals to the Department of Financial Services (DFS) more than doubled over a five year period of 2015-2020. Yet few resulted in full investigation and even fewer in prosecution. The report focused in part on the DFS Division of Investigative and Forensic Services (DIFS). It stated, “DIFS dismissed most referrals and investigations, primarily because they lacked sufficient evidence or did not meet minimum thresholds for further investigation or prosecution.”
DIFS reported that staffing issues affect its ability to investigate complex cases like insurance fraud. One in five investigator positions are vacant statewide with higher vacancies in metro areas that have higher number of fraud referrals. Deputy Chief Financial Officer Julie Jones, in response to the OPPAGA report, wrote, “The result is a dedicated but less tenured workforce of investigators. Our solution is to propose a recruitment and retention plan to increase hiring and at the same time give investigators a career plan to excellence within the division….The OPPGA report makes it clear that a fully functioning work force of experienced investigators is key to working more fraud cases in an expedited manner.”
OPPAGA made a presentation of its initial findings to the Senate Judiciary Committee on February 1, which you can read more about in our February 8 LMA Newsletter here.
Strems’ Cohort Loses Bid to Dismiss DFS Subpoena: DFS is continuing to pursue Contender Claims Consultants of Miami, an insurance adjusting firm. The Eleventh Circuit Court in Miami recently issued an Order denying the firm’s motion to dismiss a DFS petition seeking to enforce a state agency investigative subpoena.
Contender was prominently mentioned in the Florida Bar’s first filing against the now-suspended South Florida insurance plaintiff attorney Scot Strems. The Bar’s complaint and motion gives a lengthy discussion of the relationship between the Strems Law Firm (SLF) and its favored adjusters/loss consultants All Insurance Restoration Services, Inc. and Contender Claims Consultants, Inc. The motion asserts, among other things, that these companies, along with SLF, “are involved in literally thousands of claims together, more likely, tens of thousands of claims.” Referencing one of its Exhibit’s, the Bar stated that “Insurer’s counsel “never has encountered, not once, a single case where AIRS or Contender was involved, and [SLF] was not.”
LMA Newsletter of 3-15-21
