A $7M Alleged Insurance Fraud and the Espinosa Arrest Affidavit

Florida Homeowners Insurance Claims and Litigation Handbook


It’s not too often that suspicions of insurance fraud lead to a lot of evidence, but First Party Property Insurance Blog’s article on this public adjuster’s alleged fraud ring has plenty of details regarding how Miami-Dade police plan to prove their case.  This is a story about arrests, fires, water leaks, public adjusters, and more.  Check this article out to learn more about the Jorge Espinosa case and what you need to know.

And check out our update from May 22, 2015 after the break.


May 22, 2015

31 people have now been arrested. Police raided Espinosa’s house and arrested him for the additional charges of racketeering, arson, and grand theft. As this article explains, police allege Espinosa is responsible for 20 fires and 5 floods.

As discussed below, if this turns out to be true, this is very unfortunate. As I said one year ago on the subject, Florida’s public adjusters can make plenty of money without defrauding insurers. Most public adjusters do practice within the confines of the law, but these bad apples ruin it for everyone – increased scrutiny, increased claim costs, increased policy premiums.

Additionally, this is just more lesson for homeowners insurers. It’s 2015: technology can provides insurers with the ability to know everything about their claims in an instant. Claims professionals armed with technology identify fraud better, faster, and cheaper than professionals using antiquated claims systems.

With the right time and effort, any insurer can have automated reports on all of the key claim factors. Or, without any effort at all, any insurer can use CaseGlide to have vendors populate this data for them, and arm their claims team with actionable analytics on all of their claims.

Original Story

For those of you who missed it, Miami detectives recently concluded a thorough investigation into a potential $7.6M homeowner’s insurance fraud scheme, and arrested 22 people.

from http://4.bp.blogspot.com/-HWm_qXNcim4/TpxrZhFP7EI/AAAAAAAAAPw/SyoyB9ayj7U/s320/20070727_sbcfire_house_fire3.jpg

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook

Florida Homeowners Insurance Claims and Litigation Handbook and Litigation Data Reports:

Before we go on, if you are in the Florida homeowners insurance claims industry and are looking for a guide with the key cases, strategies, laws, attorneys, and adjusters, or if you’re looking for Florida litigation data reports, please visit this page to learn more about our Florida Homeowners Insurance Claims and Litigation Handbook.

If you haven’t heard about this fraud ring, here is the complete arrest affidavit. It’s a must read:

Download (PDF, 3.96MB)

Although I recommend reading the affidavit front to back, here is my summary:

The fraud investigation centers on Jorge Espinosa of Nationwide Adjusters, LLC.  In short, the arrest affidavit alleges that Espinosa and dozens more had a relatively complex ring involving several parties and a referral network. They allegedly had “runners” recruiting homeowners, remediation companies creating exorbitant bills, and fire and water leak creators.  Further, the arrest affidavit details that certain attorneys allegedly knew that the claims were fraudulent, not covered, yet allegedly continued to represent the homeowners.  The alleged fraud amounts to over $7M.

fire 2

Frankly, if the allegations are true, there is no place for this.  There are hundreds of Florida public adjusters and policyholders’ attorneys that make plenty of money without filing any fraudulent claims. Furthermore, claims personnel will never forget this, and now they must to increase their claim scrutiny moving forward to make sure they are doing their job, whether it means conducting more examinations under oath or enforcing other conditions precedent.  This slows the claim process for innocent homeowners. In addition, instead of helping resolve new claims, insurers must assign personnel to investigate their old claims to see if they may have been defrauded.

Ultimately, this investigation is in its very early stages.  We will see whether there is more cooperation that could result in revelations about additional schemes.

Disclaimer: All of the people in the arrest affidavit are innocent until proven guilty.  Charges are often dropped or reduced.


How can something like this happen? It’s easy when homeowners insurers have hundreds of people handling claims and cases without any ability to easily share and retrieve information. Although most insurers probably had personnel talk about these things at the water cooler at lunch, only one carrier had the wherewithal to take the time to stop this alleged fraud.  What does this say about the way homeowners insurers do business?  Shouldn’t every insurer set up their staff to have the opportunity, time, and resources to conduct this investigation when they need to.

If you want to be able to have all of your claim and case information searchable, reportable, easily retrievable, and usable for the next case, please message me.

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