Fraud Rises After Major Disasters--Are You Prepared to Detect it?

Fraud Rises After Major Disasters–Are You Prepared to Detect it?

It’s now been nearly two months since Hurricane Ian made landfall across the southwestern coast of Florida and moved steadily inward, bringing massive storm surge and devastating homes and businesses. The long road to restoration and rebuilding has begun but the true scope and cost of this storm’s impact will not be known for quite some time.

As homeowners and businesses start the long process of rebuilding or restoration for their damaged homes and buildings, many local and large insurers are bracing for what can come next: fraudulent claims. Disasters that cause significant damage almost always trigger a wave of fraud, whether it’s from homeowners submitting claims to fix damage that occurred before a storm hit, to vendors approaching and then encouraging homeowners to file a claim of ill report.

Using Aerial Imagery to Uncover Fraud

Citizens Property Insurance Corporation, a long-standing GIC member, has been the insurer of last resort for homeowners in Florida since 2002. As they start to reach out to their policyholders impacted by Hurricane Ian, they know how important it is to be able to detect fraud so erroneous claims aren’t validated. Currently, they’re staring down an estimate of $3.8B in losses from this one event, quite a bit up from their previous estimate of $2.6B. But their experience in reviewing and validating claims comes from real world experience in relation to Hurricane Irma.

The Special Investigations Unit (SIU) in Citizens has multiple experts steeped in how to prevent fraudulent claims and Joseph Theobald, the Senior Director for SIU, knew what to look for as claims came pouring in for Irma months and even years after it had occurred. The statute of limitations on filing a claim is three years and as late claims came in, up came the opportunity to use GIC aerial imagery for both pre- and post-disaster reviews.

“Having aerial imagery is so effective for us,” shared Theobald. “The GIC is one of the very best things in our investigator’s toolkit for an investigation into catastrophe fraud. Where else are we going to find historical photos, both pre- and post-event, for comparison? Plus, having access to historical imagery can be extremely helpful in identifying roof condition at a given point in time, especially in those cases where there is a delay in reporting the claims.”

Following Hurricane Irma, Theobald and his team were able to spot the bad actors and partnered with the Miami-Dade Police Department to bring down an entire criminal network dedicated to defrauding insurers like Citizens. They ultimately uncovered an elaborate $2.5M property claim fraud scheme.

GIC Collection of Hurricane Ian Helps Combat Fraud

As Citizens and other insurers continue to assess and address the massive need for rebuilding and restoration of their policyholders, they will need reliable data and valuable information to help determine if a claim is valid. In fact, the National Insurance Crime Bureau (NICB) even recently stated they expect to see a wide range of insurance fraud and criminal activity following this event. They expect “insurance fraud and crime could cost carriers and homeowners anywhere from $3 billion to $6 billion once all is said and done.” So how do you brace yourself against potential fraud? By accessing consistently reliable, highly accurate aerial imagery and geospatial data.

Our coverage of Hurricane Ian was one of our largest Gray Sky collections to date, requiring multiple days for capturing imagery. After all was said and done, we had collected more than 25% of the state of Florida as part of our response to Ian.

In addition to the imagery, we launched a brand new data analytics product just weeks before Ian hit. This machine learning product, Damage Assessment, takes our imagery to the next level by delivering automated property insights. Our members can quickly identify the level of damage to homes in order to concentrate their efforts on their hardest hit customers and know exactly what the level of damage is to said home. This data is also compared to a previous Blue Sky version for a more complete understanding of a home.

With high-resolution oblique and ortho imagery, plus a library of historical imagery, GIC members–like Citizens–can be rest assured they have the insights and data to back up any claim coming from a policyholder. Plus, the highly detailed imagery often means a lessened need to send out field adjusters for review and verification. As Theobald said following Hurricane Irma, “There are limited options when it comes to finding something similar to the GIC. With how fast the planes get in the air and deliver back a high-resolution product, that helps us get the most out of our resources. For us, it’s the ultimate source for imagery, and that’s why it’s so valuable.”

If you need more information or would like to request access to Hurricane Ian imagery, please fill out the form below.