Class-action lawsuit filed in Texas over alleged property insurance fraud scheme

A class-action lawsuit filed in Dallas claims a sizable insurance racket involving door-to-door solicitors, public insurance adjusters and attorneys.

The lawsuit asserted that individuals, companies and law firms supposedly representing residents with property damage insurance claims are running a pyramid scheme to coerce insurers into paying, making the completion of the actual repairs nearly impossible.

The court documents said that the scheme typically starts when a solicitor from a roofing company approaches a homeowner with property damage, claiming that the company can get the homeowner’s insurer to pay for the repairs. Once the initial payment has been done, the solicitor keeps the funds and gets a “public adjuster” to inspect the property, seeking even more payment from the homeowner’s insurer by charging a fee equal to 10% of the total claim plus other expenses.

At this point, the solicitor convinces the homeowner to hire a lawyer to get even more payments from his or her insurer, tacking an additional 25% to 40% fee for any recovery. The attorney hired, however, does not meet nor speak with the client—instead, the attorney files a lawsuit against the homeowner’s insurer without the homeowner’s knowledge, agrees to a mediation, and settles without the homeowner’s approval or consultation.

When the homeowner finally receives the settlement check, the payment is usually not enough to cover for roof repairs since it has been deducted to cover for fees and expenses of the attorney, public adjuster, and solicitor.

“This is a very real and deceitful scheme that is carried out in this state every day by those who are supposed to be helping homeowners, not ripping them off,” said Mark Ticer, an attorney for one of the claimants.

“This lawsuit is bringing to light an elaborate web of conspirators and con artists who are lining their pockets at the expense of innocent and unsuspecting homeowners, with a goal of bringing accountability, honesty and integrity back into the system,” remarked attorney Van Shaw, co-counsel for Mr. Guerra and the proposed class.

Please be careful when contractors come to your door to solicit repairs.   Not everyone has the best intentions.   If you have questions about coverage or need assistance with your home insurance, please call our office at 800-362-2809.