Insurance Fraud: It’s All About The Money

November 24, 2009 – 9:56 pm

Two stories caught my interest this morning. Two stories about insurance fraud that illustrate the fraud can be perpetrated by insureds, insurers, third-parties, regulators, and just about anyone where there is money involved.

In Florida, insurer, QBE Insurance Corporation, is facing a $500 million bad faith lawsuit by a condominium association. The association’s towers were seriously damaged in a hurricane. The allegation is that the insurer, knowing the two condominium towers faced demolition and condemnation without insurance settlement money, “[took] advantage of the socioeconomic conditions of residents and the inability of residents to raise the money to make the repairs.” In other words, the insurer is accused of delaying claim settlement to force a more advantageous settlement. The association has already won a $25 million lawsuit against the insurer in February, 2009.

But, insurers aren’t the only ones accused of behaving badly. In Indiana, a home builder plead guilty in an arson case. The home builder had recently been awarded as the builder of the home of the year in the Southwestern Indiana Builder’s Association competition. But, he is alleged to have paid another man to set fire to one of his homes in June, 2008. He pleaded guilty to mail fraud and conspiracy to commit arson.

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