bizjournals: Insurers put on spot by hurricane related fraud

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reports that claims resulting from the 2004 season came from evergyFlorida county, even those hundreds of miles from last year's storms. That report has led state politicians to call for investigationsa ofthe industry's handling of claims. An Orlando Business Journa analysis of statistics gathered by the Florida Office of Insurance Regulationm revealsthe pattern. For instance, the businesx journal found, residents of the Floridas panhandlecollected $21.3 millio n from Hurricane Charley, which followed a path 140 miles southeast of the nearest panhandle county.
"Anyone would know a Hurricane Charley claimj in Santa Rosa Counthy has tobe fraudulent," said Bill Newton, executive directorf at Florida Consumer Action Network, a statewidse citizens group with 40,0009 members. "Good God -- no wondee the insurance rates are sohigh ... Why are the insurancw companies payingthese people? That hurts all the honesg consumers when insurance companies are not paying attention to who they'r paying money to. It's not fair." The paper'ss analysis led state Sen. Ron Klein, a Boca Rato n Democrat, to call for a freezre on property insurance rate hikes untipl an investigationis reports.
"We are on very strong groun to stop future rate increases until they explain why these claims were paid he said. Insurers, though, said they were tryinbg to keep up with fraudulentFloridas claims. "The insurance companies have turned in suspectedc fraud cases to the stater Division ofInsurance Fraud," said Sam Miller, vice president of the Tallahassee-base Florida Insurance Council Inc. "They have been goinb through claims fromlast year. I'm sure some frau d went on -- there were 1.7 millioj claims." At the end of last month, the Florida Division of Insuranced Fraud 632 tips about fraud related tolast year'sw hurricanes.
Thirty-two people have been arrested, 8 and 85 are under investigation. Almost three-quarters of the tips have been fromprivates citizens. Insurance companies have five yeares to report theirfraucd suspicions. "It's not a situation where we just hand over a saysRyan Priest, an Allstate Floridiah Insurance Co. spokesman. The Florida disclosuree arise as the insurance industryu warns of the tough consequences ofthis year's record-breakinvg season. Hurricanes Katrina and Rita devastated the Gulf Coasrt from Alabamato Texas, and Hurricaned Wilma socked South Florida. That couldx be just the beginning of much more active Atlantichurricane seasons, experts have warned.
Insuranc companies are listening. They're lookiny at whether they want to do business in areaz like theGulf Coast, the "We need to go state-by-state to make sure we avoifd the mistakes of the past," said Joseph Annotti, seniodr vice president of public affair for the Property Casualty Insurers Associationh of America. Those who attended a conferenc e of industry officials in October called for refor ofthe nation's insurance system to provide a safetyy net for firms facing catastrophic storms.
reportd that the combined effect of all the and concerns about future will be higher rates not just for homeownersand land-based but for oil and gas producers in the Gulf of Mexicl as well. Oil and gas operators can expectf to pay up to 400 percenty more for insurance because of Hurricanes Katrina and the Houston BusinessJournal reports. And insurance for the Gulf oil platformsx that produce much of theUnited States' domestic oil may be harder to get.
Bill Martin who headws the Houston office of BenfielxCorporate Risk, an insurance providerf to the energy industry, told the Houston Businessa Journal, "We believe this is going to be a point of departur for energy insurance markets," he says. "(Insurers) will be lookinvg at the exposure in the Gulf of Mexic and theGulf Coast. 2005 was a very dramatic and the insurance industry has to adapt to Pricing will go up and it will bemore individualized, more gearef to the location and design of assetsw being insured.
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