Insurer disputes damning whistleblower claims from ‘60 Minutes’ report; Dems call for action

Hurricane Ian caused widespread damage in southwest Florida in late September.

The company named in a bombshell “60 Minutes” report about insurers severely shortchanging Florida homeowners after Hurricane Ian says reporters omitted key details about the issue and what it’s done to improve since then.

Democratic lawmakers say the damning exposé, which included evidence that adjuster reports were reduced by more than 90% in some cases, is more proof that the Legislature must take action to address the issue.

CBS News reporters revealed Sunday that an estimated 50,000 homeowners are still battling with their insurance companies to settle claims stemming from Hurricane Ian, which struck Florida’s Gulf Coast at near-Category 5 strength on Sept. 28, 2022.

At the center of the 13-minute segment was Sarasota adoption lawyer Jeff Rapkin and his family, whose steel roof was ripped off during the storm. After Ian passed, they called their insurer, Heritage Insurance, which sent a licensed adjuster to assess the damage.

Rapkin told CBS the adjuster surveyed the damage to their roof and home interior and determined the house would probably “need to be completely rebuilt.” Heritage ended up sending them a $15,000 check three months later and has since increased their premiums. The Rapkins are now suing the company for breach of contract and fraud.

Unfortunately, their story isn’t unique. The adjuster who went to the Rapkins, Jordan Lee, said 44 of the 46 reports he sent Florida insurers were altered without his knowledge, but submitted with his name still on them. Not one of the changed reports resulted in more money being given to policyholders. Some, he said, were reduced by as much as 98%. The sum he recommended that Heritage pay to the Rapkins was $231,368.57.

Ben Mandell, another adjuster who testified with Lee before state lawmakers about the issue in December 2022, said 18 of 20 reports he wrote after Ian were altered. He said insurers, through third-party adjustment company managers, were deliberately denying roof replacements by having them listed as roof repairs, even if the damage was irreparable.

Mandell said he refused to leave off such damage because it was illegal, and he got fired because of it.

After the “60 Minutes” episode aired, Heritage CEO Ernie Garateix issued a statement saying it is “flat wrong” that Heritage altered Lee’s or other third-party adjusters’ reports without their collaboration.

He said field adjusters like Lee must always collaborate with “those higher up in their company on their estimates” and noted that the company Lee worked for during Hurricane Ian is now out of business.

Lee, Mandell and five other whistleblower adjusters are now being represented by attorney Steven Bush, a former adjuster who told CBS that insurers are leaving policyholders with no other recourse but to sue to get their roofs repaired. Bush said he found evidence of similar report-altering practices in five other states.

He handed evidence of insurance fraud to state investigators, which led to Florida opening a criminal probe into the matter. So far, no arrests have been made on the insurer side. Doug Quinn, Executive Director of the American Policyholder Association, pointed out to CBS that the same can’t be said for those on the consumer side — policyholders, contractors and public adjusters, among others — whom Florida law enforcement “aggressively” pursues in instances of wrongdoing.

In his statement, Garateix complained CBS “ignored the fact” that Heritage signed an order with the Office of Insurance Regulation in May after the agency completed an investigation of the company.

In the order, Heritage agreed to pay a more than $1 million fine for hundreds of violations of state insurance regulations and committed to making several improvements to its processes.

“For example, we have already implemented a new claims system that tracks all names of those who work on claims,” he said. “This change was also part of coming into compliance with Florida’s new insurance reform laws after Hurricane Ian, SB 7052, which we also sent to ‘60 Minutes’ to demonstrate that there had been industry-wide reforms to claims tracking in Hurricane Ian’s aftermath.”

Garateix said Heritage conducted its own review of Hurricane Ian claims after “60 Minutes” contacted the company and found that of a random sample of 10,000 claims, 4,162 were revised downward, 2,583 were increased and 3,311 were unchanged.

He did not specify by how much the claims were adjusted up or down, nor did he explain why the sum of the figures he provided equaled 10,056, not 10,000.

“This is further evidence that we work to pay every eligible claim,” he said.

Garateix said Lee included screen enclosures in his reports, which weren’t part of homeowners’ policies. He also suggested Lee inflated his reports because it would financially benefit him, since adjuster pay is based on a percentage of claims.

He added that Heritage would not comment on Rapkin’s assertions because there is an active lawsuit.

“However, we do want to stress that there are often legitimate reasons to repair a roof versus replacing a roof,” he said.

Garateix said Heritage made “many reforms and improvements” after Ian, including the creation of a Governance and Compliance Director position to ensure the company acts in accordance with state law; an expansion of the claims quality-assurance process; additional resources to the company’s internal audit function; and various changes to keep a better document trail.

That’s a fine start but far from sufficient, leaders of the House Democratic Caucus said.

In identical letters Monday, House Democratic Leader Fentrice Driskell called on Gov. Ron DeSantis and House Speaker-designate Daniel Perez to “immediately appoint a special select legislative investigative committee” in November to further investigate the matter and propose “meaningful reforms to hold these companies accountable.”

Reps. Mike Gottlieb, Christine Hunschofsky, Dotie Joseph and Kelly Skidmore co-signed the letters.

Driskell said in a statement that House Democrats have continually insisted that changes the GOP-dominated Legislature made in recent Sessions to placate companies in Florida’s unstable insurance market “must include accountability” for the companies that ensure “folks get the benefit of their bargain when they pay their contract premiums year after year and are hit with a devastating disaster.”

“Since 2022, we’ve proposed solutions to this deplorable property insurance crisis. We proposed our ‘Triple A’ plan because Floridians deserve AAA property insurance … that is Available, Affordable, and Accountable,” she said. “We must hold these bad actors accountable and deliver meaningful solutions to Floridians.”