Exercising enhanced enforcement powers in a new state law, Louisiana’s insurance commissioner has issued a cease-and-desist order to a roofing contractor over an alleged attempt to defraud homeowners and their insurer.
Commissioner Tim Temple issued the order Oct. 1 against Zechariah “Zack” Moore of Lafayette-based Roofing Guys LLC after finding that Moore, a field representative for the company, had intentionally damaged a couple’s roof during an inspection. He allegedly advised the couple to file a storm damage claim with their property insurance company and improperly said the couple could secure a new roof for the cost of the insurance deductible, according to the state Department of Insurance.
Temple said the roofing contractor’s actions, which allegedly included acting as a public adjuster without a license, posed a threat to the public health and welfare.
“Homeowners in Louisiana deal with enough stress and uncertainty regarding the protection of their homes and families after a storm,” Temple said in a prepared statement. “The (Louisiana Department of Insurance)I is working more closely than ever with our law enforcement partners, and we will not tolerate dishonest contractors or any other bad actors defrauding policyholders and insurers to make a profit.”
Fraud by bad actors who engage in insurance fraud and file falsified claims leads to higher property insurance premiums, according to the commissioner.
“... Our citizens suffer from losing trust in the individuals they need to help put their homes and lives back in order,” he said.
An adjuster with the couple’s insurance carrier, Louisiana Farm Bureau Mutual Insurance Co., later concluded that he found 15 “creased/distressed shingles” on the couple’s roof that were not caused by wind damage and were in a condition that suggested manmade defilement, according to the cease-and-desist order.
The couple filed a police report about the roof damage in August, and Moore was arrested Sept. 26 by the Livingston Parish Sheriff’s Office, which charged him with damage to property with an intent to defraud, the cease-and-desist order said. He was released on bond after the felony arrest.
Temple issued the order after Act 389 was passed by Louisiana lawmakers, who sought to deal with fraud against insurers and consumers with greater authority. Those in the insurance industry, including the Independent Insurance Agents & Brokers of Louisiana (IIABL), have supported the Department of Insurance’s more aggressive stance on fraud.
“Fraud by anyone involved in the insurance claim process not only damages trust in the system and complicates the claim settlement process, but it also adds a direct cost that we all end up paying as policyholders in the form of increased premiums,” Ben Albright, the IIABLE chief executive officer, said in an email to the Louisiana Record.
Albright said the numbers showing the impact of fraud in Louisiana are not perfect because some fraud goes undetected.
“But the FBI estimates that insurance fraud (excluding health insurance) adds more than $40 billion in cost to the insurance system, resulting in an additional $400 to $700 in direct cost to each U.S. family in insurance premiums,” he said.
Temple has supported multiple efforts to put downward pressure on Louisiana property insurance rates, including legislation to reduce excessive litigated-claims costs and roof-fortification grants.