Recently, the Sun-Sentinel published the following article detailing how Insurers are using the RICO act to pursue fraudulent claims. The RICO act was introduced in 1970 primarily to fight THE mafia. That should be very telling to any homeowner in south Florida raising their arms in disbelief as their rates just keep going ever higher.
Let's go over the facts.
INSURANCE IS MEANT TO PROTECT YOUR ASSETS
We live in South Florida, where hurricanes are a season, not just a random topic of conversation. The question is not "if" but always "when" will a storm hit us. Live here long enough and you're bound to run into folks with stories about Andrew. Anyone pushing you or encouraging you to file a claim with a promise of "big bucks" is selling something. We've received calls from telemarketers asking if we would like to file a claim!! Let's make smart financial decisions and not gamble what, for many, is their biggest life savings. I've explained it this way to some folks: If you were given $500,000.00 in cold cash and asked to bet all of it to possibly make $20.000.00 would you? if you lose, the $500k is gone by the way. Why the gambling analogy you ask? It's simple, most folks can manage their existing monthly payments but start panicking if it goes up by 20, 30%. Wait what? 20,30%? Yes, that's a reality for tons of folks if their rates get increased and they see their monthly payments go through the roof.
SMART CLAIM MANAGEMENT
Fact is, life happens and things break. Having a legitimate claim nowadays may seem like an abnormality to many. In reality, there are ways to file a claim without too much fanfare... or lawyers (that's a RICO reference, couldn't help it).
First, do you homework: it is YOUR policy and it's meant to protect YOU. So call your agent and talk to them. Your agent should be the first point of contact (agents do not make money on your claim) and explain the process, go over your deductible and what's covered.
Second, document, document, document. Take pictures, find any paperwork, permits if applicable. The more thorough you are, the less chances you'll be asked to go find some permit for the work "that guy" did for you back in '92.
Last, but not least. Make a "reasonable" attempt to contain and prevent further damage. Many folks have problems with this one, so an example might clarify it further: Storm comes, branch falls on your roof and makes a hole, Covering the hole and documenting your efforts showing you DIDN"T allow the incoming water to cause additional damage goes a very long way towards establishing the viability of your claim. A 6in hole should not be allowed to flood your entire home AND destroy ALL your appliances and smart TVs.
Bottom line is this: any amount of money one may pocket from these claims is not going unnoticed by the insurance companies and the state. They WILL NOT LOOSE. They will just pass it back on to us in the form of higher premiums, or worse, drop your policy at renewal. Be informed, be smart and do the right thing for your financial future.