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The site has published a news piece discussing sinkhole fraud, a practice that has become rampant in states like Florida and that has drastically driven up homeowner’s insurance rates across the board.
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Online PR News – 18-August-2011 –HouseInsuranceRates.com, an Internet source for home insurance information and coverage estimates, has published a news article on its site concerning widespread sinkhole fraud among homeowners in certain states. As a result, premiums for sinkhole insurance have skyrocketed.
“We started receiving complaints from our visitors that sinkhole insurance had become prohibitively expensive, and we decided to look into the matter. What we found was that policyholders are routinely defrauding insurers by misusing the funds provided in settlements due to sinkhole damage. Our latest news piece brings this problem into the light,” explained Damon Williams, spokesman for House Insurance Rates.
In states like Florida, homeowners have seen a meteoric rise in rates for sinkhole insurance. Typically, the coverage is provided separately from a standard house insurance policy, much like flood insurance.
The most common form of sinkhole fraud, as the article points out, involves the misappropriation of the payment from the insurance company. A homeowner will see possible damage from a sinkhole, call the appropriate company, and the company can then confirm the presence of sinkhole activity. If confirmed, the insurer writes a check to the policyholder but does not follow up on how the money is used. As a result, unscrupulous homeowners have begun using the settlements to pay off credit card debt, mortgage loans, etc. instead of repairing the sinkhole damage.
“Higher premiums are not the only consequence of sinkhole insurance fraud. Carriers are also starting to change the way they do business. Many of our carriers who provide sinkhole insurance now will not issue a check directly to the claim-filing policyholder; rather, they will pay the company that performs the repairs directly, thereby avoiding the possibility of fraudulent misuse,” explained Mr. Williams.
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