Sun Sentinel Palm Beach Edition
Insurers say sponsorship encourages abuses
RoofClaim.com deal allows naming rights to college bowl game
A Georgia-based roofing contractor has secured naming rights to the Boca Raton Bowl football game through 2023 just months after Florida lawmakers loyal to the insurance industry killed a multimillion-dollar deal that would have put the company’s name on sports venues at two universities.
Insurers aren’t happy about the title sponsorship deal announced by RoofClaim.com and ESPN Events, the bowl game’s owner and operator. They say the deal to call the game the RoofClaim.com Boca Raton Bowl will encourage consumers to take part in the kind of insurance claim solicitation that’s running rampant in the state and driving up insurance costs for millions of homeowners.
“It’s a shame” that the Boca
Raton Bowl chose to take money “from an out-of-state operation that’s the poster child for why [consumers’] home insurance rates are going up,” said William Stander, executive director of the Florida Property & Casualty Association, a trade group that represents insurers in issues before the Florida Legislature.
Owned by Jasper Contractors, a Kennesaw, Georgia-based company that operates in multiple states, RoofClaim.com inked contracts last year for naming rights to Florida Atlantic University’s basketball arena and the University of Central Florida’s football team. The deals would have paid UCF $35 million and FAU $5 million.
Those deals were quashed after state lawmakers, reportedly working at the behest of the state’s powerful insurance lobby, exerted pressure on leaders of the universities by threatening to withhold state funding in the future. Lawmakers don’t
have the leverage to kill the Boca Raton Bowl title sponsorship, however, because that deal was made by ESPN Events and not FAU, host site for the game.
Terms of the deal were not announced. The bowl’s seventh edition, pitting the UCF Knights against an as-yet unnamed opponent, is scheduled Dec. 22 at 7 p.m.
If insurers had their way, they would always require customers with claims to call them first, so they could inspect and control how repairs are handled. They consider Jasper Contractors and other companies that solicit repair business from homeowners as threats to the industry’s financial stability, and to Florida consumers’ ability to buy affordable coverage, because their costs inevitably increase when third parties are involved at the beginning of the claims process.
Companies in this category include water damage restoration services and windshield replacement companies. Insurers accuse them of seeking out customers by offering to perform free inspections, and if they can find damage, persuading customers to sign over their rights to bill their insurance companies to repair those damages. If insurers balk at paying their invoices, the companies file suit.
Jasper Contractors did not respond to questions and a request for comment about the title sponsorship. But contractors typically object to insurers’ characterization of them as abusive and counter that they provide valuable services for consumers who might not know that damage from past storms or other incidents, such as plumbing malfunctions, are eligible for coverage.
Contractors and their attorneys say they only sue insurance companies as a last resort, when insurers either refuse to accept responsibility to pay for covered damages or offer to pay far less than what those damages cost to fix.
Insurers, however, describe Jasper Contractors as a “high volume” contractor that targets customers with the intent of pursuing payment from their insurers. Contractors that have adopted similar business models have caused insurers’ losses to increase sharply over recent years, insurers say, often resulting in customers finding themselves as unwitting plaintiffs in resulting lawsuits. While customers might be enticed by the prospect of a free roof, free kitchen, or free windshield, high-volume contractors and their lawyers are motivated by lawsuit settlements and legal fees, insurers say.
Lawsuits in Florida against insurers of all types, including property, auto and health, increased from 142,316 between Jan. 1 and Dec. 9 in 2015 to 322,704 during the same period in 2020, according to a state database of insurance lawsuits.
When roofing companies sue insurers, they typically blame the damage on a recent weather event, such as a hurricane or a hailstorm, and bill the insurer for the cost of replacing the entire roof. Insurers, meanwhile, try to pay to repair just the damaged portion while contending that a majority of damage was caused by aging or neglect.
Disagreements often center on what percentage of the roof was damaged by a covered event — if it’s more than 25%, Florida’s Building Code generally requires the insurer to replace the entire roof.
“It’s hard to ascertain the cause,” said Locke Burt, chairman and CEO of Ormond Beach-based Security First Insurance Co. “Was it hail, wind, rain, or is it that the roof is just old? Roofs are very difficult. The issue is usually causation.”
Jasper Contractors has filed 564 lawsuits against insurers since 2018. Other companies with high volumes of lawsuits against insurers since 2018 include Stuart-based SFR Services, 967 suits; Pelham, Alabamabased Apex Roofing and Restoration, 1,054 suits; Naples-based Island Roofing and Restoration, 692 suits; and St. Ann, Missouri-based C MR Construction and Roofing ,926 suits.
In 2016, the year before Hurricane Irma struck Florida, the five companies combined sued insurers just five times. All five were filed by a single company, CMR Construction and Roofing.
Not all roofing companies utilize this business model. Three of South Florida’s largest — Fort Lauderdale-based Advanced Roofing Inc., Davie-based Paletz Roofing & Inspections, and Pompano Beach-based Latite Roofing — have filed a total of four lawsuits against insurers since 2018.
The increase in litigation has contributed to Florida property insurers as a whole reporting net losses in three of the past four years, including $224 million in net losses in 2019, according to data compiled by Pinnacle Actuarial Resources.
To remain solvent, insurers have done what they’ve always done — increase insurance costs for all of their customers, including millions who have never filed a claim. This year, homeowners are facing premium increases of 30% to 40%, inflating many customers’ bills by $1,000 or more.
Insurers’ concerns about Jasper Contractors’ efforts to reach customers by purchasing naming rights to arenas or bowl games stem from their desire to minimize losses by avoiding having to pay for more new roofs than necessary. That goal is naturally at odds with roofing contractors’ goals of selling more roofs.
In February, the Orlando Sentinel’s Mike Bianchi reported that the state’s “influential insurance industry and several prominent politicians intervened behind the scenes” to convince the two universities to cancel the deals.
This week, one of those lawmakers, Sen.JeffBrandes of St. Petersburg, acknowledged that he was one of the intervening politicians. After reading about the deals in the newspaper, “I expressed my general disapproval and concerns. I spoke to some of the leadership at the universities who understood my concerns.” Brandes said he was one of “probably three” legislators who voiced their concerns to officials of the universities. He declined to identify the others. He also said his involvement did not result from pressure by anyone from the insurance industry, but rather from his own concerns about the company.
Brandes, a member of the state Senate’s Banking and Insurance Committee, has led efforts over the last few years to enact laws that would reduce claims abuses. As premiums continue to increase, Brandes said he plans to seek further reforms during next year’s legislative session that begins in March.
Despite his success in helping to kill the naming rights deals for the FAU and UCF facilities, Brandes this week said he doesn’t expect to wage a similar effort over the bowl game sponsorship. “I don’t know that the legislature would spend a lot of time or energy looking into that,” he said.
The difference, Brandes said, was in their effort to kill the arena and stadium naming deal last winter, lawmakers had leverage to “voice our disapproval and threaten to withhold funding going forward” if the universities didn’t rescind the deal they made directly with Jasper Contractors.
But the bowl game sponsorship was announced by the bowl game’ s owner, ESP N Events, and not the university.
Brandes said that Jasper Contractors ultimately paid for the title sponsorship with revenue that insurance customers across the state must make up by paying higher premiums.
“I don’t think most people understand how challenging Florida’s insurance market is right now and how companies like this are driving rates across the state,” he said.