April 19, 2021

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Property insurance fraud increased during pandemic

2 min read

BALTIMORE — “There are some bad actors out there and you need to protect yourself,” said Maryland Insurance Commissioner Kathleen Birrane.

After detailed investigations, the Maryland Insurance Administration has imposed a combined $480,000 in penalties against five people and four companies for insurance fraud and acting as public adjusters without a license.

“We are serious in the state of Maryland in making sure that consumers and insurance companies aren’t ripped off,” said Birrane. “Our laws are pretty clear that if you’re going to step out and pretend to be representing a consumer about their insurance needs and you’re going to negotiate on their behalf, you have to be a licensed professional.”

Birrane said these bad actors lure homeowners into unnecessary or inflated repairs by suggesting they are covered by insurance, and then offer negotiate with the insurer on the homeowners behalf in violation of state law.

“The real red flag is when they say, ‘I will handle everything with your insurance company’,” said Birrane.

That can cause harm to the consumer because they are encouraged to make claims that may not be viable and they may not get all the coverage they are actually entitled to.

“They may provide coverage for you to live in a hotel room while repairs are being done,” said Birrane. “So there are all kinds of different coverages that exist and if the only person whose on your side is a contractor who is, in this instance, trying to just get their particular repair made, they’re not gonna see that big picture.”

And in the case of one of these investigations, Birrane said a contractor was actually creating harm, by purposely damaging shingles on a homeowner’s roof to support a storm damage claim.

Other companies are still under investigation and the administration said reports of these activities have increased during the pandemic.

“As people are looking for business and looking for work and people are home and they want to attend to things within their home. The flip side unfortunately that that means that folks who are fraudsters and are looking to take advantage, their activity increases,” said Birrane.

But Birrane said there are lots of honest, hard working contractors in the state, so how can you protect yourself against the few bad actors? Make sure the contractor is licensed through the Maryland Department of Labor and if you need help negotiating with insurance, hire a licensed property adjuster.

“Don’t let somebody represent you who doesn’t have the right qualifications. That’s the key,” said Birrane.

As for the investigations, the parties in each of the cases have 30 days from the date of the order to request an evidentiary hearing if they wish to contest the orders or the penalties.

The administration has an online guide to help consumers going through property loss as well as a Consumer Education and Advocacy unit to answer any questions.