When you applied for your homeowners’ insurance policy, did you disclose any liens filed against you or anything else from your past that might have marred your credit history? Are you sure about your response?
If you’re like many Floridians, a minor bump in the road in your credit history, like a credit card default, that has been long since taken care of and long since forgotten may have slipped your mind when you applied for insurance. No big deal, right? Well, your insurer might twist this minor omission into an accusation of application fraud in an attempt to deny your insurance claim during your time of need.
Reportedly, some insurers operating in Florida do not bother to investigate an insurance applicant by running a credit history check and background report before granting coverage. However, as soon as a claim is filed, they then do some digging into the past of the insured. These insurers may even ask homeowners directly whether they have had liens filed against them in the past; the homeowners often answer in the affirmative, confused about the question and unaware that the answer will be used against them to avoid providing the payout they should be entitled to.
When something comes up that the homeowner forgot to mention on the initial insurance application, the insurer calls it application fraud and denies the claim.
This scam, known as post-loss underwriting, is obviously less about making sure that insurance companies only grant coverage based on complete information than it is about insurance companies avoiding coverage after a loss has occurred in order to maximize profits. You do not have to fall victim to the scheme, however; a Florida homeowners’ insurance claims lawyer can help dispel insurance company tricks and get you the money you are entitled to.
Source: ABC Action News, I-Team: Consumer advocates say insurance applications used to deny claims, Francis Gilpin, July 8, 2013Share