The insurance industry has complained loudly that schemes by roofers to claim age-related wear and tear from wind or hail damage, to be covered by insurance payments, have grown in number in recent years and drive up insurance costs and premiums.
Some said Wednesday that bans on deductible schemes have been in place in Florida laws for years, and that the arrests were long overdue. Others said the charges that investigators filed with the state Department of Financial Services may send a wanted signal to the state’s unscrupulous bishop’s contractors.
Michael Peltier, head of communications for Citizens Property Insurance Corp. Florida’s largest homeowner’s insurance company: “The announcement of these arrests is very positive.” “We’ve seen an increase in these types of roof cases in the past few years.”
“The idea of enforcing regulations is welcome,” said Mike Silvers, director of technical services for the Florida Federation of Roofing and Sheet Metal Contractors. “This is a widespread problem and it creates problems on many levels,” including hurting those companies that don’t promote questionable insurance claims.
Florida Chief Financial Officer Jimmy Patronis’ office announced Wednesday that Brian Webb and Brandon Jordan of Webb Roofing & Construction, in Naples, were charged with nine counts late last week of filing fraudulent insurance claims, a felony. The arrest record for the Collier County Sheriff’s Office shows that Webb, the 58-year-old president of the company, has also been charged with being a fugitive from justice. Jordan, 41, was booked into Lee County Jail and released on bail.
The Department of Field Support said the men, if convicted, could face up to 45 years in prison and $45,000 in fines.
Webb and Jordan could not be reached for comment on Wednesday.
Patronis’ office said DFS investigators found that the alleged scheme worked as follows: Webb Roofing employees tempted homeowners to file insurance claims for roofs allegedly damaged by Hurricane Irma in 2017. Florida law requires insurers in most cases to pay for roof replacement Completely, not just repairs, when surfaces are damaged.
DFS explained that salespeople will require the homeowner to sign a benefit assignment agreement in addition to an “advertising agreement.” By signing the agreement and allowing an advertising banner to be placed in the homeowners’ front yard, Webb Roofing then “deducts” or “credits” the amount of the rebate against the cost of the claim, which is illegal under Florida law.
“Fraudulent roofing schemes raise insurance rates for every family in Florida and plague our state,” Patronis said in a statement. “There is no such thing as a free cap, and if someone comes to your door to offer rebates or commissions to file a cap claim on your behalf, report the fraud to my office immediately.”
A DFS spokesperson said the number of contractors who have been tasked with similar practices in recent years, and the number who may be currently under investigation, was not available on Wednesday.
The idea of free cap offers and paid discounts has become a burning issue in the Florida insurance industry in the past few years. A few lawmakers at the 2022 legislative session last month brandished copies of “free cap” leaflets distributed by ceiling companies as evidence that state laws need strengthening to stop the practice and limit insurance industry losses.
But some industry insiders have mistaken state regulators for not using existing state laws to crack down on more roofers. Florida Code 817,234 notes that “the contractor, or a person acting on behalf of the contractor, may not intentionally or with intent to harm, deceive, deceive, pay, waived or deduct all or part of the deductible insurance applicable to payment to the contractor, or A person acting on behalf of the contractor, for repairs to property covered by a property insurance policy.
Patronis’ office did not indicate what law Webb and Jordan were charged under, when or why the investigation was conducted, or why no more contractors were investigated under the law.
Silvers, of the Bishop’s Society, said it could be difficult for DFS investigators to prove that the contractor actually offered to pay the deductible when the company promised a discount or discounts to customers. Successful trials also require cooperation from homeowners who just got a new roof at no cost to them.
The provisions in Senate Bill 76, which was signed into law in 2021, have given regulators and insurers more ammunition and may have more available soon, depending on the outcome of a pending lawsuit. The law prohibits advertisements by contractors that “urge the consumer to contact the contractor or public control officer for the purpose of filing an insurance claim for roof damage.”
The law also prohibits soliciting contractors, offering homeowners rebates, gift cards, cash, waiving deductions, or anything of value in exchange for allowing the company to check the ceiling or file an insurance claim. Part of that law was frozen by a federal judge in response to a lawsuit by Bishop’s Corporation accusing them that the law deprived them of their constitutional right to free speech. The final decision in the case is pending.
Meanwhile, stakeholders said, the “free cap” request is becoming more prevalent in parts of Florida. And it’s hard for homeowners to say “no.”
“It’s become a big part of the residential roofing market,” said Silvers, who owns a roofing company in St. Petersburg.
He said the Roofing Association has received a number of complaints from consumers who have agreed to the prepaid discount schemes, only to find that the industry is shoddy and their new roofs have leaks.
However, Silvers said the insurance companies have brought some problems upon themselves. Some insurance companies in Florida have begun notifying policyholders that they will not renew or write homes with roofs more than 10 years old. He said that only encouraged fraud.
“If your roof is eight years old and you now have to replace it when it’s ten, you would certainly look favorably upon the man who knocks on your door and offers you a ‘free roof,'” Silvers wrote in Roving Magazine this month.
He said some homeowners may be willing to take advantage of the insurance company if they feel the insurance company is not being fair to them about ordering a new roof after 10 years only when Section 20 is supposed to last at least.
Some contractors have also filed fraudulent claims from the AOB arguing that hail damaged the roof. But Silvers said hail is rare and, in most cases, isn’t limited to roofs and will also damage cars and other parts of the home. Insurers should be more aware of this and look at claims with suspicion when no other evidence can be found nearby.
Silvers said discount payment schemes appear to be done mostly by many of the larger roofing contractors across the state, and it may not take more arrests announced to get them to pay attention and limit their bidding efforts.
“I hope you’re starting to turn around,” he said.