How big was the cat? Investigator warns of complaints of clogged toilets

Did you hear the one about cat poop clogging a toilet, resulting in thousands of gallons of sewage in your home and a big insurance claim?

Lin Werkheiser, an insurance fraud investigator, has heard this and many others like it.

“Our first question was, ‘How big was the cat?'” said Werkheiser, who led a Coalition Against Insurance Fraud webinar this week on the growing trend of false or exaggerated water damage claims across the country.

As director of special investigations for the Bureau of Investigation, based in Temecula, California and Lake Mary, Florida, Werkheiser said a clogged toilet should rarely result in more than a few gallons of water spilling into a property. But schemers continue to try to claim that such far-fetched scenarios have damaged entire structures, all in an effort to get hefty insurance payouts, he said.

And Werkheiser said his team has noticed a disturbing trend in recent years: Many water damage claims appear to be related to home defense, including by real estate investors hoping to trick title insurers into paying for renovations before selling a home. properties.

In some cases, insurance adjusters were called in to inspect damage to homes that were clearly undergoing remodeling or renovation. The owner/policyholder claimed, however, that the polythene sheeting hung inside the house was done to “dry out” or repair the property after the massive water leak.

In reality, Werkheiser said, the plate was probably installed by a contractor for dust control during renovation work. Investigators’ moisture meters also found widely varying moisture levels throughout the house, on walls away from the alleged source of the leak, and no signs of water penetration on the ceiling above.

“All of this raises red flags,” he said.

Werkheiser’s examples are similar to claims highlighted by several engineers and insurance adjusters in Florida. They said in 2022 they saw an increase in HO policy claims blaming cast iron drainage pipes in older homes for breaks, clogs and leaks. But in many cases, the pipes last for decades and are not the source of the water. In another case, an engineer said someone smeared what appeared to be tomato sauce on the ceiling to simulate a leak.

In a case involving Werkheiser in California, homeowners alleged that a 2-year-old child dropped something in the toilet, then figured out how to flush the toilet just moments before the family left for vacation. The family said they returned home to find the place flooded and filed a major claim.

Turns out the family didn’t go to Disneyland like they said they did. And investigators scoffed at the idea that a toddler was smart enough to flush the toilet. “We had a lot of trouble with it,” Werkheiser said.

He offered other red flags for insurers to look for and how to manage them:

Remove property records and building permit records to determine whether there are connections between claimants, purchasers, public adjusters and contractors. In some cases, he noted, renovation firms are owned by relatives of homeowners or adjusters. Some Florida insurance companies have made similar allegations over the years.

Check your living expenses. In other cases, policyholders may claim that additional living expenses are necessary while a home is being repaired. But in at least one case, the luxury AirB&B or rental property was owned by the plaintiff’s brother-in-law. In another example, the homeowner claimed living expenses—a bed and breakfast rental—but never left the insured home.

Check similar commercial property listings. “Now we’re seeing these types of claims creeping into commercial properties,” Werkheiser said, referring to business interruption claims.

Beware of multiple claims on the same property in a short period of timeespecially in the first 90 days of writing a policy. Also, look for the same photos submitted in different claims or listings with the same content.

Check the invoices. Investigators saw what appeared to be legitimate bed bug extermination invoices from a supplier, replete with logos, addresses and invoice numbers. But when they checked, the exterminator explained that the documents were fake: they showed the site, but no record of the work was found. “They were generated by AI,” Werkheiser said. “So we don’t take documents at face value.”

Ask for damaged equipment or photos of water-damaged property and contents. Scammers have been known to often claim that “this was all thrown away”. If the parts are available, take them for examination and so that they cannot be used again in a future claim. Another red flag: Insurers or public adjusters refusing or refusing to provide original photos, which can be checked for metadata showing when the photos were taken.

Review “Category 3” water claims.. Water damage claims are of three types: Category 1 includes water leaks from clean and potable water sources. Category 2 is gray water, usually from bathroom or kitchen drains. Category 3 is nasty waste water from toilet drains, which increases the severity of the complaint due to contamination. Werkheiser said insurers and investigators should always ask why the claimant or adjuster believes water damage is considered a Cat 3 claim.