Roofing Scams Target Florida Homeowners

According to area experts this kind of dishonest activity is rampant in Florida with upscale neighborhoods where the average age of a roof is 18 and 20 years old being the prime targets.

It’s been a tough storm season in Florida, leaving many people worried that their roof might have hail damage. This has led to some shady roofers to start working with less than honest attorneys to scam homeowners and their insurance companies utilizing the assignment-of-benefits (AOB) clauses that are in most homeowner insurance policies.

According to recent reports, in Orlando, roofers are contacting homeowners and falsely claiming their roof need to be replaced due to hail damage. They offer to do the work for free, but in most cases the roofs are fine and not damaged, the roofing company is simply trying to obtain an AOB from the homeowner, which allows them to bill the insurance company for work that may or may not be done.

According to area experts this kind of dishonest activity is rampant in Florida with upscale neighborhoods where the average age of a roof is 18 and 20 years old being the prime targets.

Insurance Doesn’t Cover Wear and Tear

Homeowners insurance does not cover the gradual wear and tear of the roof. It is designed to cover damage that is sudden and accidental, such as when a roof caves in or is completely destroyed due to a severe storm.

While hail can certainly do severe damage to a roof, in the majority of these cases there is no previous record of roof damage, or even degradation. After a storm, these less than honest roofing companies show up to offer a free roof inspection to homeowners.

Homeowners are asked to sign an AOB contract prior to their free roof inspection. The inspection almost always reveals severe damage (according to the roofing company), which can only be remedied via a new roof.

The work is then done before a claim is made which means any evidence regarding the old roof is no longer available. In many cases the actual work done is shoddy.

Most of the roofing companies pulling this scam are from out of town and according to local law enforcement the number of companies participating is not that high. County data shows of the 2,422 wind and hail claims filed in 2014 in Orange, Lake, Pasco and Hillsborough counties, roughly 72 percent were related to only three roofing companies.

These roofing companies partner with shady law firms in order to process the claim and sue the insurance company if necessary. It is a small number of law firms that are participating. The majority of claims, roughly 90%, are originating from 20 law firms. 

Insurance Companies are Paying Up

In many cases insurance companies are paying the inflated claims because it is more cost-effective than going to court to fight less than honest claims.

While this scam was mainly focused in South Florida it has recently moved into Orlando, Jacksonville, Tallahassee as well as other parts of the state. It is also leading to higher Florida homeowner insurance rates as insurance companies request rate increases to recoup some of their losses due to these scams.

People’s Trust, a South Florida based insurance company recently requested a 14.5% rate hike. Florida Peninsula followed suite with a 9.0 percent rate increase and People’s Trust asked for a whopping 14.5 percent.

Consumers Need to be Wary

As the population of Florida continues to grow, the number of lawsuits related to AOB claims also continues to grow. Data from the Department of Financial Services’ Service of Process (SOP) shows that the population in Florida grew 26 percent between 2000 to 2016. During that same period, the number of lawsuits against insurance companies went up roughly 280 percent.

Unfortunately, victims of these crimes are not filing complaints as often as they should, possibly due to embarrassment of being scammed. The regional BBB branch reported that they received 57,000 inquiries regarding roofing contractors in 2016, but only received 150 complaints.

Here are a few tips to avoid being scammed:

• If a roofing company contacts you, inform your insurance company and ask for an independent inspection of your roof.
• Get several written quotes from local roofing companies.
• Ask to see their business licensing information and insurance information.
• Don’t sign any documents without fully reviewing them. If you don’t understand something, contact a lawyer.
• Get referrals from friends and family.
• Ask for and check references for any company that you are seriously considering.
• Check with the local BBB office in regards to complaints.