Fraudulent Smoke and Ash Homeowners Claims Spread with Wildfires, According to Mercury Insurance

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07/15/2022 - 09:15 AM

Mercury has uncovered a growing trend in criminals falsifying homeowners insurance fire claims.

LOS ANGELES, July 15, 2022 /PRNewswire/ -- Mercury Insurance Special Investigations Unit (SIU), the CSI of insurance, has uncovered a large number of fraudulent claims were reported for smoke and ash damage by the same public adjuster—a red flag that illegal claims were being filed.

"When we checked on our insureds to see how we can help them and make sure we fulfill our promise of being there for them, many were unaware a claim was filed on their homeowner's policy," said Pete Galassi, Mercury Insurance special investigations unit manager. "Some professional entities don't care about the harm they can do and will use trickery to take advantage of law abiding homeowners in vulnerable situations."

The public adjuster was promising "thousands of dollars" to homeowners without any out-of-pocket expense through a variety of convincing sales pitches that included assertions of a state government program. Homeowners were being "duped" into believing they would receive money for smoke and ash claims to insurance companies handing out money on behalf of the state of California to homeowners who were affected by smoke and ash damage.

In other instances, phony public adjusters were asking homeowners to sign a document to allow them to inspect their home to take "soil samples." The signed documents were a letter of representation and a settlement contract. Many homeowners were non-English speaking and did not understand the documents they were signing. One public adjuster went as far as to send out flyers to homeowners, fly planes with advertisement banners, and completed door to door canvasing to obtain signatures.

"Elderly parents of our homeowners were duped into forging the homeowner's signature on letter of representations and settlement contracts without their knowledge or understanding what they were signing," said Galassi. "Other policyholders were lied to by the public adjuster when told the claim would not be filed on their insurance policy or would not affect their insurance premiums."

Galassi has tips for policyholders:

Do not sign any document you do not understand and do not give your insurance policy information to anyone;
Do not allow a stranger to inspect or work in your home without fully understanding their purpose and fee;
Verify alleged government programs with government officials first before signing any documents; and
If you have questions on claims that can be filed, call your insurance agent directly.

About Mercury Insurance

Mercury Insurance (NYSE: MCY) is a multiple-line insurance carrier predominantly offering personal auto, homeowners, renters and commercial insurance through a network of independent agents in Arizona, California, Illinois, Georgia, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia, as well as auto insurance in Florida. Mercury writes other lines of insurance in various states, including business owners and business auto, landlord, home-sharing, ride-hailing and mechanical protection insurance.

Since 1962, Mercury has provided customers with tremendous value for their insurance dollar by pairing ultracompetitive rates with excellent customer service. Mercury has earned "A" ratings from A.M. Best and Fitch, as well as ranking highest in the J.D. Power 2021 U.S. Insurance Digital Experience Study^SM and four consecutive "Best Auto Insurance Company" awards from Insure.com. For more information visit www.MercuryInsurance.com or follow the company on Twitter or Facebook.