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Every year, people may face the unfortunate process of having to file a home insurance claim, and that can often be trying on its own. However, in the state of Florida, there has recently been an uptick in the number of fraudsters who are posing as home repair companies and ripping off both insurers and homeowners alike. Now, the state government seems more focused on helping to stop that kind of crime in its tracks.

The damage from this type of fraud - in which people sign contracts with repair companies to do some repair work, but then end up being overcharged for it - goes well beyond the potential cost to insurers, according to a report from the office of state Rep. David Santiago, a Republican representing the 27th District who also serves on the House's Insurance and Banking Subcommittee. That's because those policy providers will typically only cover a certain amount of the cost, and if people are left with thousands of dollars or more worth of bogus repairs left over and still to pay, they could be hit with a lien or a lawsuit.

What's going on?
This relates back to ""assignment of benefits"" forms, which allow insurers to pay contractors directly and help consumers to avoid paying anything up front, the report said. But some unscrupulous repair companies will intentionally do things to drive up the price of their work, and then may leave homeowners uninformed about what's going on with their claims. And when or if their insurers refuse to pay for certain costs above and beyond what is reasonable for a given job, that leaves homeowners holding the bag to some extent. Now, Santiago says he's going to try to address this issue in the coming months with some legislation that could put more power back into homeowners' hands.

Insurance agents might therefore want to take the time to explain to clients the kind of impact this kind of practice can have on their policies, whether they're being hit by it or not. Fraud has the effect of generally increasing insurance costs for everyone with a policy regardless of whether they've been victimized themselves. Educating people as to the means by which these crimes are committed, and what they might be able to do to protect themselves could go a long way toward increasing customer satisfaction and maximizing retention rates.

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