INSURANCE FRAUDSTER MUST PAY INSURER FULL RESTITUTION

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Plaintiff Liberty Insurance Corporation (“Liberty”) issued a homeowners insurance policy to Defendant Jack Strunk that was active when his home was damaged by fire. Strunk made two insurance claims: one for fire damage and another for alleged theft of certain personal property after the fire. Strunk sued Liberty for the payment of the alleged damages. That case was removed to federal court and ultimately settled by Liberty paying $100,000 to Strunk.

In Liberty Insurance Corporation v. Jack A. Strunk, Civil Action No. 5:24-128-DCR, United States District Court, E.D. Kentucky (April 4, 2025) Liberty sued Strunk for return of the amounts paid in settlement after he pleaded guilty to defrauding Liberty.

THE CRIMINAL CONVICTION

Strunk was convicted of felony insurance fraud. This is not contested as Strunk admited to ...

Private Limitation of Action Provision Defeats Suit Against Insurer
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This case involves a contractual statute of limitations in an insurance policy. Sidney and Shatika Davis (together, “Davis”) argue the trial court erroneously granted summary judgment in favor of Homeowners of America Insurance Company (“HAIC”).

In Sidney Davis And Shatika Davis v. Homeowners Of America Insurance Company, No. 05-24-00035-CV, Court of Appeals of Texas, Fifth District, Dallas (April 7, 2025) because: (i) the contractual limitations period was valid (ii) the limitations was not tolled, (iii) HAIC did not breach the contract by failing to pay the amounts claimed, and (iv) HAIC addressed the fraud claim in its summary judgment motion.

BACKGROUND

HAIC issued an insurance policy for the Davis property (the “Property”). The Policy includes a contractual limitations period that requires suit to be filed by ...

Indicators That Require a Fraud Investigation

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The Reason for the Study of Red Flags of Fraud
Suspicious insurance claims have common attributes. Insurers and their anti-fraud organizations have collated the common attributes into lists of indicators or red flags of fraud. The lists were created as training aids and to be used to determine whether further investigation is required to determine if a claim is legitimate or false and fraudulent. Continually growing, these lists are known as the “red flags” or “indicators” of fraud lists. There are many different categories, ranging from those associated with the claim itself or with insureds to indicators of specific types of fraud, such as bodily injury fraud or arson for profit.

If, when assessing a claim, three or more red flags are found the need for further investigation should be considered and evaluated by the claims person, a supervisor and the insurer’s special investigative unit. The existence...