The Frustrating Nature of Insurer Fraud

There are two sets of rules that apply in this country: one set of rules for individuals and another set for companies.

Corporations get away with stuff all the time that would land a person in jail. They get away with stuff in litigation that would result in a court hammering an individual plaintiff. If they ever do get caught and sanctioned, it’s often just a slap on the wrist.

Take the 60 Minutes episode recently on insurer fraud in Florida.

After Hurricane Ian, insurance companies changed reports from public adjusters. Public adjusters who actually went to a house and said there was hundreds of thousands of dollars worth of damages. Insurance companies changed reports to have them say the damage was more like $15K.

Did any of those companies get criminally prosecuted? Nope. Are any going to get sanctioned in a civil court? Probably not.

Not only that, Florida then actually changed their laws to make it harder to hold insurance companies accountable!

It isn’t hard to find other examples of insurer fraud. Look at State Farm’s fraud during Hurricane Katrina that resulted in it having to pay the federal government $100 million. A drop in the bucket for a company with over $87 billion in annual revenue. For those doing the math, that is .115% of their revenue (or the same as a person making $100,000 a year getting fined $115).

Could you imagine what would happen to an individual plaintiff, or an attorney, who engaged in a $100 million fraud?

A person engaged in insurance fraud should certainly be held accountable. But insurance companies should be held accountable as well.

At most, when they get caught, they get a slap on the wrist and it is often after years of protracted litigation.

I don’t think that’s fair. Do you? Join the conversation with me on LinkedIn.