Playing with Fire: Insurance Fraud is a Criminal Offense


Olympus Insurance takes pride in protecting our policyholders’ valuables and properties with comprehensive homeowner policies that are unparalleled in the industry. We also strive to protect our policyholders from insurance fraud.

Recent industry estimates put property/casualty insurance fraud amounts at more than $30 billion a year nationwide with approximately 10 percent—some insurance companies estimate 20 percent—of the industry’s total annual losses attributable to fraudulent claims.

With fraud so prevalent, many homeowners are led, unwittingly or otherwise, into participating in many cases tricked by contractors or convinced that it can't be that bad simply because so many others are participating in it. Other policyholders feel entitled to money from an insurance policy if they have been paying premiums for years and have had no claims.

However, there are serious consequences in Florida for insurance fraud, and perpetrators face misdemeanor charges or felony charges if convicted of insurance fraud. Bottom line: insurance fraud is a criminal act.

What is Insurance Fraud?

Insurance fraud occurs when falsified information is presented on an insurance application, or when the insured makes a false, exaggerated, or deliberate injury or loss claim to wrongfully receive compensation or benefits. In other words, a person sets out to defraud, deceive, or mislead an insurer.

Participants in insurance fraud range from unassuming, unaware policyholders to policyholders who are seeking to avoid paying their deductible and those looking for easy, extra cash. General contractors and repairmen often perpetrate fraud either with or without the homeowner's knowledge by exaggerating bids and charging for unnecessary services.

Examples of Insurance Fraud


Staged Accidents

A fire or flood may be staged in the home in order to collect insurance for extensive damages. Arson is the most common type of homeowner insurance fraud, since the insured is typically covered for both the structure and its contents. An insured may also intentionally destroy property if they expect to receive a greater value in return in the form of an insurance payout; or they may hide property then stage a burglary or break-in and claim items as lost or stolen.

Exaggerated Claims

The insured may add items to the claim that never existed, inflate the value of a damaged or stolen item, or adjust the actual age of an item to compensate for depreciation. An individual may also make a second claim for damage or loss already paid through a prior claim or insurer. The insured may improperly represent the extent, cause, date or location of actual damage that occurred. In many cases, a repairman or general contractor will offer to cover the deductible, which they accomplish by increasing a bill or estimate or by submitting phony repair bills or receipts.

The State of Insurance Fraud in Florida

Florida is no stranger to epidemic insurance fraud. A highly transient state vulnerable to potentially severe wind and rain events creates a perfect storm for insurance fraudsters across the spectrum. A Citizens Property Insurance Co. report from October 2013 noted that Miami Dade property owners account for only 19 percent of Citizen policies, but for 35 percent of all non-sinkhole-related claims. In addition, Citizens’ Miami Dade policyholders account for 67 percent of claims that lead to lawsuits.

 In 2014 and 2015, individuals in a home insurance fraud ring in Miami were charged with intentionally setting fires or causing floods in homes that cost insurers close to $14 million. The group actively recruited homeowners willing to destroy their homes and file a claim in which the fraudster received 20-30% of the settlement. In this case one adjuster was accused of arson, forgery, racketeering and grand theft and faced more than 30 years in federal prison.

 Another scheme playing out in Florida is one in which contractors, public adjustors and attorneys submit exaggerated repair claims for water leaks and sue if insurance companies refuse to pay out, driving up legal fees. This prevalence of water restoration fraud meant that Citizens experienced an increase in water damage claims of 45 percent between 2010 and 2014, and the average cost of each claim rose 43 percent during that same time. The idea that pipe leaks suddenly increased across the state, causing legitimate damage during that time frame, is farfetched.

Roofing fraud is also increasing in Florida, particularly after severe weather events. There may be the promise of a free new roof, a new television, or waiving of a deductible for a new roof that you may or may not need. If you go along with the roofer's tactic to overinflate a roofing estimate to cover your deductible, you are participating in fraud.

 As an insurance company, Olympus is required by law to collect your deductible. In other fraudulent roofing cases, “contractors” may submit damage photos from a different roof or intentionally damage your roof further while inspecting it (something the con artist will usually offer to do for free).

Penalties and Punishment in Florida for Insurance Fraud

If the value of the property involved in the fraudulent claim is less than $20,000, the criminal penalty is a third degree felony. If it’s $20,000 or more, but less than $100,000, the offender has committed a second degree felony. If it’s $100,000 or more, the crime is a first degree felony.

If convicted of misdemeanor or felony insurance fraud in Florida, individuals face penalties which can vary, with prison sentences typically following Florida’s felony theft statutes that range from five years for third-degree grand theft to 30 years for first-degree grand theft.

If one fakes a theft or intentionally damages personal property to receive benefits, the penalties may be more severe than if one falsifies part of a valid insurance claim or exaggerates damages. The convicted may also have to pay mandatory court costs in addition to restitution.

Protecting Yourself and Reporting Insurance Fraud

Everyone loses with insurance fraud. Insurance companies overwhelmed by the illegal practice are forced to charge higher premiums to try to compensate for these losses. Don’t fall victim to fraud, participate in fraud, and pay more for your homeowners policy due to fraud. Should you have legitimate damage, make Olympus Insurance your first call to ensure that you are doing business with ethical individuals.

If you suspect fraud, call the Olympus claims line at 866-281-2242. You may also reach out anonymously to the Florida Department of Financial Services at 800-378-0445, or use this online form.

About Olympus Insurance Company

Headquartered in Palm Beach Gardens, FL and founded in 2007, Olympus Insurance Company specializes in Florida property insurance. Through its independent agency force, Olympus

insures $45 billion worth of residential and investment property including homes, condos, rental property, and valuable personal property. The company also writes flood insurance and umbrella policies.  Coverage for individual risks up to $5 million in total insured value is provided on one of the most comprehensive coverage forms in the industry. For more information, visit

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