State leaders say we are paying for storm damage that never happened

Fueling Florida's insurance crisis

Craig Patrick reports

TAMPA - While Hurricanes Debbie, Helen and Milton cost billions, state leaders say we are also paying for storm damage that never occurred.

They say long before the hurricanes of 2024, a lot of homeowners received new roofs, and their insurance companies were wrongly charged for them—fueling soaring premiums and Florida’s insurance crisis.

Kim Ferris knows more about this than she ever cared to learn.

"The nightmare started with a knock at the door," she said. "The man asked did you know we had a storm here? Mind if I check your roof for you? And I said sure."

She said the man claimed she had roof damage from a tornado and hurricane, and that she could get a new roof paid for by her property insurance company.

"I said I’m going to think about it. He said, would you mind signing this paper? I said, what’s that? He said that it just acknowledged I was here. I said sure no problem."

Kim said she then called two other roofers and neither found any storm damage, but that paper she signed came back to haunt her.

"He said we have a contract. I said, what contract? I never got a copy or anything."

She said she told him she was going with somebody else and was told she couldn’t. "He said, oh you can’t do that because we’re going sue you now for 33.5% of the insurance money, but I said I never put a claim in. And he said, we did."

She said nearly $40,000 later she got a new roof. She paid the $1,000 deductible, while her insurance company, Citizens, paid the rest.

Insurance may question a claim like that but decide it's probably cheaper just to pay the claim than fight it in court.

"In lieu of paying $70-$80K to litigate the claim, often times insurers will just write a $25,000 or $35,000 check just to get rid of it," said Jeff Brandes, a former Florida State Senator and President of Florida Policy Project.

Brandes and state leaders say that's a big part of what's driving up costs to insurance companies, which drives up our premiums.

The legislature recently banned papers known as 'assignment of benefits' which allowed roofers to file claims on homeowners' behalf. They also reduced the amount of financial risk insurance companies face when they fight claims in court.

However, lawmakers, realtors, and home inspectors like Michael Bender say the problem starts with contractors who claim a roof is storm damaged when it really isn't, and that source of the problem appears to have gone largely unaddressed.

"I'm watching them canvas neighborhoods going door after door after door—then we come back three weeks later, and it's bang, bang, bang, bang, putting roofs on everywhere," said home inspector Michael Bender.

We can’t confirm Kim Ferris’ claims and don’t know whether they rise to the level of insurance fraud. She's reported it to the state to investigate.

The state Department of Financial Services is responsible for policing contractor insurance fraud, and former State Senator Jeff Brandes says it also has a problem.

"The Department of Financial Services is really overwhelmed with the number of cases that come through their door," he said.

FOX 13 started requesting arrest stats last summer. It took more than a year and repeated requests to receive the home insurance fraud numbers.

They show in 2018, state agents made a total of 53 insurance fraud arrests across Florida. In 2019, they dropped to 37 arrests. In 2020, they dipped to 22.

In 2021, as the home insurance crisis escalated and complaints shot up, arrests for fraud nudged up to 39 statewide, with a total of 19 successful prosecutions.

In 2022, total contractor insurance fraud arrests ticked up to 54 (back where we were in 2018) with 45 successful prosecutions.

In 2023, arrests nudged up to 102, and we're on a similar pace in 2024—all much lower than those who claim they've seen rampant fraud in a state of more than 22 million people.

"There’s a disconnect, there’s some system that's not in place. I don’t know if it’s somebody not doing their job or some system we don’t have. I don’t know, but it’s not getting done," Bender said.

"You have two different groups that monitor the insurance industry, Office of Insurance Regulation and Department of Financial Services," Brandes explained. "Those should probably be combined into one entity. They should be focused on identifying fraud wherever they can."

The state offers up to $25,000 for tips leading to an arrest and conviction.

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