Insurance is mandatory for a homeowner to have on a house that has a mortgage. You won’t be able to go to settlement without having an insurance policy (if you have a lender), and if you lose the coverage, it will be placed forcibly by the mortgage company. Every homeowner’s policy is priced in accordance with where the house is located, what is in the house, what materials it is made of, and who the homeowner is. In addition, your premium depends on the overall cost of doing business for the insurance company.
It is therefore in the best interests of the homeowners to be vigilant in their claims process, since it ultimately will affect them financially in the long run. I would also say that it is in the best interests of the insurance companies to be equally vigilant. They seem to agree. Insurance fraud is estimated to be increasing household insurance premiums by an average of $1000 per year.
In the state of Maryland, the Maryland Insurance Administration is, according to its’ website, an “independent state agency that regulates Maryland’s insurance industry and protects consumers by enforcing insurance laws.” One of their responsibilities is to “Investigate acts of insurance fraud”. So what is insurance fraud? It happens when someone files a false claim for damages, or does something to deceive an insurance company in order to profit financially. I should know. I am indirectly involved in something that looks like fraud to me.
I was notified about an alleged fire that happened at one of the houses I co-own. Except I wasn’t told about it until I was asked to sign the insurance payout check. Supposedly, a fire happened next door, causing electrical damage to our property. Supposedly, a guy was paid to put new electrical wiring into the damaged house, and fix the walls he was going to have to tear out in order to do so. The receipt I was provided to substantiate the claim differed from the other two versions that had been provided to other parties (one being the insurance company themselves). They had been obviously altered with whiteout by someone. This was just the start of trouble.
I couldn’t quite figure out how a claim was paid on a policy that bore two names, with only one person’s signature approving the claim. The Maryland Fair Plan, which is the insurance company, said (when I pressed the issue) that they actually only needed ONE signature in order to process the claim. Okay, if you say so, though it sounds wrong. But then there was the matter of HOW and WHY did the insurance company leave off the name of our mortgagee from the insurance check? When there is a lien on your car, or a mortgage on your home, the insurance claim check is made out to ALL parties who have an interest in the property. Meaning, your car loan or house note company is going to be on the check. Yet, it wasn’t done in this situation. Hmmm.
What was the most troubling part is when I found out that the electrical work hadn’t actually been done in the kitchen of the house (majority of fire damage), which caused the house to fail its’ inspection with the Housing Choice Voucher folks in Baltimore, which triggered the tenant to be issued a voucher to move (which she did). Clearly, the electrical work that the insurance company thought was done, hadn’t actually been done. Yet, a claim worth almost $4000 had been paid out as if it had been done.
When I tried to inform the insurance company that I was uncomfortable with the circumstances regarding the alleged fire, alleged damages, alleged electrical work, my missing signature, and the mortgage company’s missing name, they acted as if they didn’t understand why I had a problem with any of it. Almost like those sorts of things are routine for them.
“..deceive an insurance company in order to make money”, that’s what the site says. When it looks like fraud, reads like fraud, it likely IS fraud. If that was routine for insurance companies, Why? Do they have any responsibility? They do, if they won’t even take their own policyholders seriously, who are telling them that something is not right. Maybe it needs to be like the story below to get their attention. In the meantime, it got my attention, since my insurance premiums have been raised as a result of the greed of another. See HERE.
You’ll notice in the story, these words: “in good faith — accepted Levonian’s word.” Perhaps that was the largest part of the problem, as this site continues to point out.
For you, Maryland Joint Insurance: