Reinsurance News

“Large number” of fraudulent smoke and ash damage claims reported

2nd August 2022 - Author: Daniel Jackson

Mercury Insurance Special Investigations Unit has discovered that a large number of fraudulent claims were reported for smoke and ash damage by the same public adjuster.

Pete Galassi, Mercury Insurance special investigations unit manager, said: “Many were unaware a claim was filed on their homeowner’s policy”.

“Some professional entities don’t care about the harm they can do and will use trickery to take advantage of law-abiding homeowners in vulnerable situations.”

The public adjuster was promising “thousands of dollars” to homeowners without any out-of-pocket expense through a variety of convincing sales pitches that included assertions of a state government program.

Homeowners were being “duped” into believing they would receive money for smoke and ash claims to insurance companies handing out money on behalf of the state of California to homeowners who were affected by smoke and ash damage.

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In other instances, public adjusters were asking homeowners to sign a document to allow them to inspect their home to take “soil samples.”

The signed documents were a letter of representation and a settlement contract. Many homeowners were non-English speaking and did not understand the documents they were signing.

One public adjuster went as far as to send out flyers to homeowners, fly planes with advertisement banners, and completed door to door canvasing to obtain signatures.

Galassi said: “Elderly parents of our homeowners were duped into forging the homeowner’s signature on letter of representations and settlement contracts without their knowledge or understanding what they were signing.”

“Other policyholders were lied to by the public adjuster when told the claim would not be filed on their insurance policy or would not affect their insurance premiums.”

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