ny could then bill the insured’s carrier for
work that didn’t need to be done, or for
work that was never even done.
Insurers must understand that to successfully combat fraudulent water mitigation claims they must identify and
investigate these relationships, as well as
eliminate the entire network.
How do you identify a network of operatives in a water mitigation scam? A
performance trend analysis may be the
solution. Simply put, it’s doing a thorough
examination of everyone and everything
involved in the mitigation and restoration.
• Review all the documents associated
with the claim. Carefully examine all
businesses and service people involved
— how many times has that person
or group of people been involved in a
collaborate on mitigations more often
than can be attributed to coincidence?
Are their bills higher than most others?
suggest intent. Compile the informa-
tion gathered from these investigatory
forays to create a playbook for future
cases. That way, you’ll know what to
look for, and what you may need to
know even before you enter the dis-
covery phase of a case.
judge or a jury that something the water
mitigation company characterizes as a
mistake, actually is a pattern and practice of the company with the intent to
deceive the insurer and collect insurance
benefits to which they are not entitled.
And just as you must identify all of the
players in a mitigation fraud network before launching an investigation, you must
attack them all when litigating the case.
There are two good reasons for this.
First, like a multi-headed monster, cutting off one part of a damage mitigation
network leaves the rest to continue the
fraud, while the one damaged grows back.
Second, there might not be enough evi-
dence to file against the mitigation compa-
ny or the head of the ring. However, by ag-
gressively pursuing everyone involved in
the fraud, you may be able to get that evi-
dence from someone else in the scheme.
It may be possible to find a back door
inside the ring’s operation that provides
access to hidden information and provides
the ammunition to take down the leader. It
may also be possible to cultivate a valuable
confidential informant who can provide
inside information on additional scams.
A win-win in the battle
Also, examine all claims in the aggregate,
rather than just the one case under consideration. Seek out examples that show
the company in the client’s claim, which
used restoration business “X” or plumber
“Y,” used those same vendors in multiple
other cases — particularly if one or more
of those claims were deemed fraudulent.
Finding a pattern of complicity that extends well beyond coincidence may help
point the way to fraud.
Be judicious, but take certain cases to
court. That accomplishes two things. It
forces the mitigation companies to prove
a loss is covered, and that their charges
are reasonable. It also demonstrates to
them, and others, that the company is
willing to stand up to fraud and won’t
make payments on inflated claims. Many
times those fraudulent companies will
stop targeting your company and focus
their efforts elsewhere — such as on carriers that do not scrutinize fraudulent
claims as closely.
The time has passed for carriers or the
industry to just yell “fraud!” and expect
action. They need to demonstrate concrete evidence that fraud has been committed and exactly how much that fraud is
costing individual consumers. Only then
will it be possible to put a crimp in fraudulent mitigation claims, and only then will
lawmakers be willing to take up legislation
that helps curb such criminal activity.
Brian S. Tenzer, Esq. is a partner at
Goldstein Law Group in Fort Lauderdale,
Fla. Tenzer serves on the Florida Advisory
Committee on Arson Prevention and is a
member of the Broward County Bar Association, National Society of Professional
Insurance Investigators, National Fire Protection Association and Florida Property &
Casualty Insurance Fraud Task Force.