What is causing the property insurance spike in Florida?
TAMPA, Fla. (WFLA) – As Florida homeowners continue to deal with soaring home insurance prices, Florida’s chief financial officer says fraud is driving up insurance premiums.
CFO Jimmy Patronis, who is responsible for fraud enforcement, stood alongside Citizens Property Insurance CEO Barry Gilway in Tampa on Thursday as they announced how they foiled a scheme.
A trial describes the alleged crimes committed against all of us. They say it started in 2014. Now, eight years later, there is a civil settlement but no one has been held criminally liable.
“We closed the mechanism tightly,” Gilway said.
Eight years ago, Gilway says he noticed lawyer Scot Strems and a few contractors fabricating claims – 600 claims a year.
According to chief financial officer Patronis, the alleged fraud was costing taxpayers $16 million a year. Fed up, the insurance company, acting alone, filed a civil lawsuit alleging racketeering in June 2020.
“And how many complaints did we receive last year? Zero,” Gilway said. “Believe me, it’s not a free roof, you’re paying for your neighbor’s roof, in many cases.”
Gilway says Mr. Strems has denied any wrongdoing. But the Florida Supreme Court suspended his license for two years. In March, Strems and his co-defendants agreed to a $1 million settlement.
“That’s why your insurance premiums are going up,” Chief Financial Officer Patronis said. “Remember, this is fraud, this is a crime.”
So, is anyone being charged in connection with this alleged fraud ring? Patronis is responsible for investigating fraud and referring cases to prosecutors.
“Every year since I’ve been in the job, about five years now, we’ve had about 3,500 arrests, but that’s about car insurance, health insurance,” Patronis said.
According to Patronis, during his tenure as CFO, 148 people were convicted of property insurance fraud; and the criminal investigation into this alleged ring continues.
8 On Your Side asked if the CFO’s office needed help from federal law enforcement.
“You know, I’m sure at some point there could be a multi-state jurisdictional issue about this, but I think the men and women we have here are equipped to do that,” said he declared. “But do we need more boots on the pitch, of course.”
At the special session later this month, Patronis will ask lawmakers for more resources. 8 On Your Side will be there to cover it.
In the meantime, Citizens says it has referred 400 cases from the alleged network to the CFO.