Wednesday, June 4, 2008

Ohio Takes Fight to Insurance Fraud Participants

Director Mary Jo Hudson announced the Ohio Department of Insurance will be investigating home repair contractors believed to be committing insurance fraud. The agency will also look into situations where it appears contractors are violating Ohio insurance laws.

In the wake of damaging storms, such as a hail storm or a tornado, unscrupulous contractors tend to drift state-to-state and prey on desperate people anxious to get their property repaired and lives back in order. In one instance reported, a consumer unwittingly granted Power of Attorney to their roofing contractor. The roofer then managed to negotiate the insurance transaction and pocket the consumer’s insurance proceeds without doing the work.

In order to combat insurance fraud committed by unscrupulous contractors, the Department is implementing new techniques to detect and investigate situations where it is believed home repair contractors have committed insurance fraud. Examples include situations where general contractors may have intentionally damaged property belonging to a consumer in order to justify the need for repairs, submitted estimates and invoices containing false or deceptive statements to Ohio’s insurance carriers, failed to provide consumers with products and services agreed upon, installed a lower quality product than what was originally promised or defrauded consumers of their insurance proceeds.

The Department further plans to take action against home repair contractors who, on a consumer’s behalf, assist in the negotiation or settlement of a personal property claim.

As part of the Department’s initiative, the agency plans to provide companies and organizations in the home repair industry with information about Ohio’s Public Adjuster statutes. A Public Insurance Adjustor’s license is needed for a third party, who is not an attorney, if hired to represent a consumer in any insurance claim. A Public Insurance Adjustor may not benefit from the work that is associated with the claim. Additionally, the Department will work with the insurance industry to provide consumers with helpful tips they can use in the wake of a natural disaster.

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