A number of low-budget insurers target segments of South Florida’s population where English is a second language. The scam by insurance companies works as follows:
First, the individual goes to an insurance agency to obtain PIP insurance for their automobile. The insured pays their premium and believe they have automobile insurance to cover their medical expenses if and when they are injured in an automobile accident.
Upon getting in an automobile accident and seeking medical treatment, the insurance company sets up an Examination Under Oath (EUO), and asks the insured all sorts of questions. The questions revolve around a number of issues ancillary to the insurer’s purpose for the questioning, such as the medical treatment and what happened to cause the accident. The real purpose for the EUO is engage in post-loss underwriting.
Post-loss underwriting is a practice in which the insurer investigates the application for insurance after an insurance claim. The insurer asks questions about prior accidents and household members. If they found out that something was not disclosed on the application for insurance, they claim there is a “material misrepresentation” and rescind the insurance policy. The insured’s medical bills are never paid for, and it is as if there was no insurance in the first place.
Post-loss underwriting is an illegal practice in many states. However, this reprehensible practice is still legal in the state of Florida. What this practice allows insurers to do is to collect premiums, and make money off those premiums. The insurer, despite having many tools accessible to them, does not verify any of the information obtained by their agents unless and until there is a claim by the insured. Once there is a claim, the insurer seeks to rescind the policy.
This practice seeks to guarantee that the insurer does not have any risk. The insurer collects premiums on policies where there are no claims, and does not pay out on policies where there are claims. This guarantees maximum profits for these predatory insurers.
The majority of the time, the target of these scams are some of the minority communities in South Florida. These insurers have targeted our Haitian and Hispanic communities predominantly.
Our firm has discovered the prevalence of fraud by these insurers and their agents in procuring applications for insurance and in improperly rescinding insurance policies. Many times, the insurer is lying about household members they “discover” live with the applicant for insurance. Other times, none of the questions on the application have ever been asked of the insurance applicant. Much of the time, the applicant for insurance does not even speak English.
If you have had any claims denied for material misrepresentation, please contact our office so that we can fight for your rights.