Florida homeowners insurance claims denied on flimsy grounds

Since so many aspects of life are unpredictable, Florida residents frequently take precautions by maintaining a homeowners insurance policy. When storms inflict damage or someone is injured on a person’s property, insurers can provide much-needed support for homeowners.

Unfortunately, however, insurance companies often take steps to deny legitimate insurance claims, simply to protect their own bottom line. The reality is that people often file homeowners insurance claims in times of need, so an unfairly denied claim can be particularly damaging. A recent report revealed that a major insurer routinely denies coverage to homeowners based on allegations of fraud. However, observers note that this might be part of a widespread, unfair practice.

Universal Property and Casualty Co. is responsible for insuring a large number of people in Miami and the rest of the state. When homeowners submit an application for coverage, it’s common for Universal to conduct credit and background checks. If there are minor inconsistencies between the application and personal or credit histories, application fraud may be used as justification for denying claims.

One Florida couple ran into this very issue when they filed a $20,000 claim to fix a major water leak. After pursuing coverage from the insurance company, they were asked if they had any liens for outstanding debts. The woman involved in the claim forgot about an old credit card debt, so the insurer claimed that she and her fiancé committed application “fraud,” and their claim was denied. Now, the couple is dealing with the effects of water damage without the funds to make necessary repairs.

In this case, homeowners may have made honest mistakes that have been construed as fraud. Florida residents placed in a similar bind may want to determine what legal options exist to appeal denials of coverage.

Source: ABC Action News, “Consumer advocates say insurance applications used to deny claims,” Francis Gilpin, July 9, 2013

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