SIU CASES OF INTEREST EXECUTIVE SUMMARY CLAIMS COMMITTEE Claims Operations Miami / Cooking Fire: The insured reported that a pan on the stove caught fire, resulting in smoke damage throughout the home; loss was reported to Citizens three months after the loss occurred and after repairs were completed. An Origin and Cause expert confirmed that there was no evidence that a fire had occurred in the residence. The claim, reserved at $17,500, was subsequently withdrawn prior to completion of an Examination Under Oath. A DIF referral was Miami / Burglary: The insured reported that her residence was burglarized and personal property valued at $25,000 was stolen. SIU investigator interviewed responding law enforcement officers and established that the insured had altered the police report. During the EUO the insured s attorney withdrew his representation of the insured. The claim, reserved at $10,000, was subsequently withdrawn by the insured. A DIF referral was Miami/ Sinkhole: The insured reported structural and cosmetic damage to his residence as a result of sinkhole activity. SIU identified prior sinkhole claims affecting the property. The insured appeared for an Examination Under Oath and admitted they were aware that the damage existed since 2004 and prior to the inception of the policy. The claim, reserved at $80,520, was subsequently denied as the damage occurred outside the policy period. A DIF referral was Miami-Dade / Water Plumbing Loss: The Insured reported water damage to the kitchen cabinets due to a failed drain line under the sink. Citizens initially tendered settlement of $30,595. The claim was reopened when the insured demanded appraisal seeking an additional $44,735. The SIU investigation revealed that the insured had submitted a similar claim three years earlier to their previous carrier and that he had received payment for the identical damage. The SIU investigation revealed that the insured attempted to claim the same unrepaired damage. The insured also misrepresented the existence of damage on their Policy Application. The appraisal demand was closed when the insured failed to cooperate with the investigation and no further payments were made. A DIF referral was Miami-Dade / Water Roof Leak: The Insured reported water damage to the kitchen cabinets and wood flooring resulting from a roof leak. The insured had 2 prior claims with Citizens in which he claimed similar damage. SIU investigation revealed that the insured was claiming the same damage from a pre-existing loss and that the insured misrepresented the condition and status of repairs. The claim, reserved at $30,000 was denied for pre-existing damage. As the result of the referral to DIF, the Insured was arrested by the Division of Insurance Fraud. Miami-Dade / Water Damage - Sewer Backup: The insured reported that his residence sustained water damage from an alleged back up that was similar to a prior loss which settled in litigation. During his statement with SIU, the insured initially claimed that the damage was new. During his Examination Under Oath, the insured admitted that the damage pre- dated the 1 of 5
Citizens policy. The claim, reserved at $30,500, was denied for pre-existing damage. A DIF referral was Miami Dade / Kitchen Fire: The insured reported fire and smoke damage resulting from an unattended cooking fire at his residence. An Origin and Cause investigation concluded that the fire patterns were not consistent with an accidental fire. The insured s property was not fully furnished and did not appear to support ongoing occupancy. The SIU investigation confirmed that the insured was not living at the property address at the time of the loss. During his Examination Under Oath, the insured misrepresented the condition and occupancy of the property. The claim, reserved at $23,000, was denied citing the intentional loss exclusion and material misrepresentation. A DIF referral was Miami-Dade / Water - Plumbing Loss: The insured reported that a supply line under the kitchen sink ruptured resulting in damage that appeared identical to a previous loss in which Citizens had paid to replace the kitchen cabinets. The SIU investigation revealed no evidence of a new loss and that the insured submitted a claim for unrepaired damage from a prior claim in which she received a settlement. The claim, reserved at $20,000, was denied due to preexisting damage. A DIF referral was Miami-Dade / Dropped Object: The insured reported that a ceiling fan in their residence fell and damaged the tile flooring. Loss history revealed a prior loss with a similar description. The insured submitted a signed affidavit claiming that the damage from the prior claim had been repaired. SIU obtained the prior carrier s claim file which confirmed proof that the insured had presented a claim to Citizens for unrepaired damage sustained in a previous loss. The claim, reserved at $1,000, was subsequently denied for pre-existing damage. A DIF referral was Miami-Dade / Water Pipe Break: The insured reported that a supply line under the kitchen sink ruptured, resulting in water damage to the kitchen cabinets. The supply line was repaired prior to the risk inspection, however, there was no evidence of water damage to the cabinet near where the leak was alleged to have occurred. At the request of SIU, a plumbing expert was retained and determined that the water damage to the cabinetry predated the loss by more than 30 days and was the result of long term leakage. The claim, reserved at $10,500, was denied as there was no evidence of a sudden and accidental loss to trigger coverage. A DIF referral was Miami-Dade / Water-Roof Leak: The insured reported that his rental property sustained water damage from a roof leak. Citizens tendered an initial payment of $6,419.41. The claim was reopened when the public adjuster filed an appraisal demand for $28,292, citing additional damage. SIU inspected the loss and assisted in the coordination of an expert who obtained samples of the ceiling stains which tested positive for the presence of caffeine. The insured withdrew their appraisal demand after SIU requested a recorded interview. The claim, reserved at $12,500.00, was closed without further payments. A DIF referral was Miami-Dade / Water Pipe Break: The insured reported water damage to the kitchen cabinets as a result of a plumbing break in the supply line under the sink. During his interview with SIU, the insured gave conflicting statements regarding how the loss occurred and was unable to describe what repairs were made. SIU observed that there was no water damage in the area of 2 of 5
the supply line. At the request of SIU, an expert was assigned to inspect the water damage and concluded that the water damage as reported could not be attributed to a plumbing leak and there was no evidence of the repairs claimed by the insured. The claim, reserved at $15,500.00, was denied due to lack of evidence of damage attributable to a sudden and accidental water loss. Miami Dade / Water-Pipe Break: The insured s public adjuster reported a roof leak to the insured rental property that caused water related damages to the interior of the residence. However, the damage did not appear to be from a recent event. The insured retained a water mitigation service provider to conduct dry-out of the residence and signed an Assignment of Benefits document. An expert determined that the damages were long term and the result of lack of maintenance. The SIU investigation developed evidence that confirmed the insureds attempted to claim damages which had been pre-existing for a long period of time. The claim, reserved at $22,500, was denied for wear and tear/ maintenance. A DIF referral was Broward / Fire The insured reported that an accidental fire damaged both of his duplex units. The cause of the fire was determined to be an electrical malfunction related to efforts to illegally obtain electricity to run a marajuana grow house. The named insured, who is an electrician by trade, told SIU that he last lived at the insured risk in 2012, before renting out both units. He observed no modifications to the home or other damage when he most recently rented the home to tenants and denied any involvement in the grow house. The SIU investigation revealed that the insured was frequently inside the home. The claim, reserved at $93,000, was closed without payment when the insured withdrew his claim. A DIF referral was Broward / Water - Plumbing Leakage or Break: The insured reported damage to the kitchen cabinets and drywall resulting from a broken sink pipe. The claim was settled and an appraisal demand was received. Claim history showed two prior water claims with another carrer. During the recorded statement, the insured stated she had not had a similar loss before and only mentioned a prior theft claim. SIU obtained insurance records from the prior carrier which depicted identical damage. The SIU investigation revealed that the insured misrepresented the date of the loss, reported pre-existing damage as new and was previously indemnified for damage she failed to repair. A DIF referral was Palm Beach / Water - Plumbing Leakage or Break: The insured reported a shower pan leak caused water damage throughout the home. Citizens tendered initial payment of $9,851. The claim was reopened when the insured filed suit against Citizens seeking an additional payment of $45,877 for the damages. In support of his claim, the insured provided documentation that repairs following the loss had not been made. However, this conflicted with documentation of evidence that repairs had been made previously submitted by the insured to underwriting in support of maintaining their policy coverage with Citizens. A receipt that was alleged to have been for repair was submitted to underwriting in the amount of $9,190.98 to prove that damages resulting from the shower pan leak were completed in order to avoid cancellation of the insurance policy. Citizens prevailed on a Motion for Summary Judgment based upon concealment and fraud upon the court. A DIF referral was Palm Beach / Dropped Object and Water- Plumbing Leakage or Break: The insured claimed that one of his children fell in the shower and broke one of the shower tiles. Citizens initially 3 of 5
tendered a payment of $1,471 in settlement of the claim. The claim was reopened when the insured was seeking an additional unspecified amount alleging that additional repairs were required due to local ordinance code issues. An expert stated the tile floor was improperly installed originally and there was evidence of a long term leak. A mold remediation invoice submitted by the insured included charges for water extraction, trauma/crime scene remediation, and hazardous material remediation. The SIU investigation revealed that the remediation company did not complete any mold remediation at the home; the invoice was fabricated by a relative at the company in an attempt to assist the insured in obtaining additional funds from Citizens. A representative with the remediation company stated that he looked into the matter and that the company was never under contract with the insured and never completed any work at his home. No further payments were made. A DIF referral was Palm Beach / Water Damage - The claim involves interior water damage reportedly caused by the backup of an upstairs toilet; the loss was reported 4 months after it occurred. The damages being claimed were found to be identical to those seen in a claim filed with another carrier three years earlier. The insured claimed to have made repairs after the prior loss, but failed to provide proof of said repairs. The insured was scheduled for an Examination Under Oath on three separate occasions and failed to appear each time. The claim, reserved at $15,000, was denied for failure to appear for three set Examinations Under Oath. A DIF referral was Palm Beach / Water Damage The insured reported water damage to the kitchen cabinets and flooring resulting from a sudden and accidental water leak in the kitchen, which occurred during a two week period while the insured was away from the home. Citizens initially tendered a settlement of $13,107. The claim was reopened when the insured submitted an appraisal demand seeking an additional $13,883. An expert was retained and found no evidence of defects within the faucet that was alleged to have caused the leak. SIU obtained the water consumption records which revealed that water usage was the lowest during the month of the loss. The appraisal demand was denied and no further payments were made. A DIF referral was Charlotte / Fire: The insured reported that the property sustained damage as a result of an unattended cooking fire and water damage from fire department. Citizens inspected the home several days after the fire loss and noted 2-3 inches of water still in the home, which the insured alleged was from the fire department s hoses. SIU investigation obtained proof that the water in the home was staged after the fire department cleared the scene. SIU obtained photos of the house which confirmed the condition prior to Citizens inspection and interviewed fire department officials who confirmed that hoses were not used to extinguish the fire. The claim, reserved at $39,930, was denied due to material misrepresentation, concealment and fraud. A DIF referral was submitted and their investigation is active. Clearwater / Water Pipe Break: The insured reported water damage throughout the home resulting from a leak from a washing machine; this was the second similar loss reported within months. SIU established that the insured attempted to claim unrepaired damage from the previous claim. After requests by SIU for additional invoices to document that repairs had occurred, the insured withdrew her claim. The claim, reserved at $5,418 was closed without payment. A DIF referral was 4 of 5
Lee / Water Plumbing - Pipe Break: SIU investigation revealed that the water mitigation provider appeared to have acted as a public adjuster on behalf of the insured as he submitted the demand for appraisal and attempted to negotiate on her behalf. The SIU investigation revealed that the individual submitted an estimate, Assignment of Benefits and demand for appraisal to Citizens. A DIF referral was Underwriting Volusia / Agent Application Misrepresentation: The insured reported personal property stolen resulting from a burglary to her residence, which occurred the same day that coverage was obtained. An investigation by SIU revealed that a CSR at the agency bound coverage for the residence despite direct knowledge from the insured that the burglary had already occurred. Moreover, the agency was aware that the risk was not eligible for coverage with Citizens due to electrical deficiencies, which Citizens had communicated to the agency a month prior when the policy was canceled. Citizens ultimately issued a claim payment of $3,000 as it was determined that the coverage had been bound, noting that coverage takes place at 12:01PM the day it is bound. Agency Compliance was advised. Palm Beach / Submission of false documentation by non-appointed Agent: An SIU investigation into an agency determined that a non-appointed agent issued evidence of property insurance to a third party, certifying that a policy was issued by Citizens and was in force. It was determined that the agent had issued the certification based upon the application with Citizens, which eventually was returned to the agent unbound by underwriting. SIU collaborated with Agency Compliance and it was determined that the agent was in the process of being appointed with Citizens and that although submitting the evidence of certification was an administrative violation, there was no evidence of an intent to deceive or commit an insurance crime. 5 of 5