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Show Summary
In this episode of the Real Estate Pros Podcast, host Q Edmonds speaks with Doug Quinn, the executive director of the American Policy Holder Association. They discuss the challenges faced by consumers in the insurance industry, particularly in the wake of disasters like Superstorm Sandy. Doug shares his personal experience with insurance fraud and the formation of his organization to advocate for consumer rights. The conversation highlights the impact of rising insurance costs on real estate values and the need for accountability in the insurance sector.
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Doug Quinn APA (00:00)
I do appreciate you giving us credit for running a smooth machine, but I promise you it’s anything but smooth. It is a knockdown, drag out, street brawl every single day against one of the wealthiest, most powerful industries in the country who supports many people’s political careers, ⁓ corporate jobs and country club lifestyles ⁓ all at the expense. Way too often of average consumers who are just looking to recover from a loss, rebuild their homes and return to their community and continue to contribute to the American economy. That’s who we stand up for.Quentin (02:12)
Hello, everyone. Welcome to the Real Estate Pros Podcast. I am your host, Q Edmonds. you know, I normally say I’m excited. And I am. excited about my guests. But we’ve been talking. And I have to be honest. He has something that I really feel like we need to hear, a message that needs to be heard. ⁓ You know, we are real estate lean and investor lean and podcast. I, you know,I know that some of the things that he’s going to talk about, he’s going to talk about how there is money that should be allocated for affordable housing and different things like that. But it’s not because of some of the things that’s going on within his industry and some of the things that he sees. And so I’m going to let him explain to yourself, but I am excited about this podcast. But also it comes with just thinking about the responsibility of the things that we should do.
and position that we hold. So I’m excited. You I’m excited to be able to bring to your listening ears, Mr. Douglas Quinn, and I’m excited to hear what he has to say and for you to see things through his lens. So Mr. Douglas, how you doing today,
Doug Quinn APA (03:22)
Doing well, Quentin. Thank you for having me on.Quentin (03:25)
Absolutely, man, absolutely. Like I said, you definitely come with a unique perspective and lens. And I want you to just take time to experience it into us. Take us into your world. Let us know the things that you are focused on these days. And just talk to us a little bit about what it is that you do.Doug Quinn APA (03:45)
So I am Doug Quinn. the executive director of the American Policy Holder Association. We’re an organization that was formed in 2018, sort of as the result of a scandal that happened after Superstorm Sandy hit the Northeast. ⁓ You know, going back to that, I was a financial advisor for 30 years. My firm was owned by a very large, well-known insurance company. I’m a very big believer in insurance. I still am. ⁓ I got flooded out.My home was completely wiped out and when I put in a claim for my insurance company, they tried to pay me 37 cents on the dollar ⁓ and they hired an engineer who basically created a fraudulent report saying it was pre-existing damage. It was the result of shifting soils, what’s called earth movement, which
⁓ conveniently as an exclusion from flood insurance, you know, those giant cracks in my foundation had been there all the time and it was due to, you know, earth movement. And I knew it wasn’t because I had just bought my house the year before. I pictures and inspections and ⁓ in the process of fighting that I…
found out a lot of people were having that same experience.
Exact same thing. They were hiring engineers and the engineers were all saying, no, Earth movement or it was pre-existing. And people were getting cheated on their claims, became very active and going to congressional hearings and working with.
our senator’s office and community organizing groups and other survivors groups to try to crack this. And we actually did crack the case when we had the New York attorney general raid an engineering firm on Long Island and seize all their files. And they went back a couple of weeks later, found out that they had been changing reports. And even if the engineer on the ground said, yes, this was damage, they would just add the word not before they sent it to the insurance company. In some cases, this is not.
flood damage. So they walked one of their managers out in handcuffs and that was on the front page of all the papers. It kind of cracked the case. We were able to get 144,000 claims reopened and something to the tune of $350 million paid out to people who had been cheated. And then in the process of, you know, fighting that we kind of saw that this was not unique. This had been happening before. There were allegations before and it’s still happening now. So
We formed the American Policy Holders Association. A whole crew of us got together down in New Orleans, people from the survivor side like myself, people from our elected officials offices, public adjusters, plaintiffs, attorneys, ⁓ restoration contractors, people who kind of see this all the time, all got together and formed this organization with the sole purpose of saying, you know,
We’re done suing. If you’re stealing from people, there needs to be criminal consequences from that. If any of us stole from an insurance company, we would be in handcuffs and deservingly so. And people do steal from insurance companies regularly. That needs to be fought because it costs all of us. But crime happens on all sides. There’s no job title. There’s no race. There’s no ⁓ economic status.
or there is no zip code or geographical region that makes people immune from committing crime and committing fraud. So it doesn’t really matter whether you’re hiring a contractor or an adjuster or a insurance company engineer or a congressman or a senator for that matter. know, there’s a certain percentage of the population that’s willing to commit crime for a profit or to avoid a loss. And no matter what kind of job title you’re talking about,
that percentage of the population comes along with it. So the fact that you will almost never see anybody from the insurance side arrested for cheating a consumer on a claim is very telling and very disturbing. It basically means that the ⁓ law enforcement and regulatory apparatus that’s in place to protect us from being defrauded on our insurance claim is not effectively working.
Quentin (08:54)
No, well, Mr. Douglas, man, so much good information. I appreciate you, you know, bringing this to our attention. I’m sure a lot wasn’t aware of things that I’m learning and hearing for the first time. So I know what you do is not especially easy in this climate. You I you talked about, you know, building trust. So what keeps the machine running smoothly? What keeps you guys kind ofyou know, I won the prize and keep the thing pushing, keep your movement pushing the way forward that it needs to get pushed.
Doug Quinn APA (09:33)
I do appreciate you giving us credit for running a smooth machine, but I promise you it’s anything but smooth. It is a knockdown, drag out, street brawl every single day against one of the wealthiest, most powerful industries in the country who supports many people’s political careers, ⁓ corporate jobs and country club lifestyles ⁓ all at the expense.way too often of average consumers
who are just looking to recover from a loss, rebuild their homes and return to their community and continue to contribute to the American economy. That’s who we stand up for.
certainly many of your watchers or your people that watch your podcast are very focused on real estate values and investment opportunities in the real estate world. you know, listen, insurance is an important safety net.
I believe very heavily in insurance. is a risk management tool that allows the average person to come back from a loss that would otherwise be catastrophic. That would be a loss of generational wealth. So, you know, people contribute their money. They make their premium payments, even though sometimes it hurts to put that safety net in place. But when that safety net fails and they’re unable to rebuild their home and they’re unable to return home.
have their children sleep in their own bed, or they have to do so at the expense of their own savings, taking on more debt, spending their college funds, spending their retirement money. I’ve seen it all. It’s bad for not just that family, it’s bad for the community, it’s bad for the industry, it’s bad for the American economy as a whole. And there’s a lot of pieces that cut into, listen, if you’re focused, we’re looking at insurance rates rising.
And there’s some legitimate reasons for that. There’s inflation, there’s climate change that’s causing more disasters in both in frequency and intensity. You know, we’re watching construction supplies, so rebuilding is going up as well. So that’s obviously going to add upward pressure on premiums. But there is quite a lot of other things going on where sometimes companies are just being greedy or individuals are just being greedy. Premiums are skyrocketing up and the pieces
that impact real estate values add a lot of downward pressure. ⁓ It allows minimal available money for housing. There’s only so much money people have for a budget. And if a huge amount is going into an insurance premium, well, that’s less they can spend to purchase a home. It’s basically a zero sum solution. If that extra dollar is going for a higher insurance premium, that’s a dollar less that’s going toward your home purchase or your investment in real estate. ⁓
existing homeowners are being forced to sell in some areas. We’re watching a pretty big exodus out of Florida because a lot of people who retired down there and cannot afford any more on their fixed income to pay these incredible insurance rates. The average rate I saw quoted, you’ll see a lot of numbers, is like $7,000 a year. I had friends who just bought down there, they got a great deal on the house and then they found out their insurance premium is going to be $19,000 a year.
Quentin (13:08)
Hmm.Mm.
Doug Quinn APA (13:30)
So there’s a lot of people who had moved. Now they have to sell their house and move out of there because they can’t afford it. So obviously that’s going to be downward pressure on real estate values. Insurance companies failure to pay claims is leaving either unrepaired or poorly repaired properties out there, which obviously again is going to affect real estate prices. It’s going to affect the market. You’ll see a lot of people just walk away from their property after disaster because the insurance company didn’t payor didn’t pay what they were supposed to, and they just don’t have it in them to fight, right? It’s a lot, especially if it was, you if you’ve had a significant loss of fire or tree hit your house or, you you were hit by a disaster, people just don’t have the energy to fight all the time, so they’ll walk away. ⁓ You’ll see something interesting. ⁓ In Washington, there’s this trend to cut federal disaster aid, right? And the White House has signaled they want to put more of the
burden for recovering for disasters on the states. But most states don’t have that money. Most states run at a deficit. It’s not like they have, you know, $20 billion left over to help people recover from a disaster. So we’re seeing, you know, FEMA’s in the process of getting dismantled. We’re seeing cuts in federal disaster aid. And that is going to leave less money available for people to recover. And therefore, that insurance is going to be that much more important.
and we need the insurance to work the way it’s supposed to to rebuild homes and communities.
And then you’re also looking at companies that are pulling out of states, pulling out of regions because of the risk. We’re not going to insure because of California fire. We’re not going to insure Louisiana or Florida because of hurricanes. And when people can’t get insurance, what else can’t they get? Can’t get a mortgage, right?
federally insured mortgage, you know, you are required to have homeowners insurance and if you’re in a flood zone to have flood insurance, if you’re in what’s called the special flood hazard area, the SFHA, you have to have flood insurance. And if you can’t get insurance, well, you’re not getting that mortgage, or if you can’t afford the insurance and therefore you’re not buying that house. So that’s all downward pressure on real estate values. So it should be very concerning to your viewership.
Quentin (16:39)
Absolutely. It’s interesting that you that you’re saying this because today I talked to did a podcast episode with someone from Florida and he was talking about the mad exodus. He was talking about things changing. The landscape is changing and he didn’t mention, you know, insurance specifically, but he talked about how just the market is changing like this. Everything’s just looking different. It’s a mad exodus that’s happening. So just listen to you say that just making a correlation.I can see, I can see exactly what you’re talking about. And I can see how it’s been affecting, you know, things in the landscape within real estate. So, Mr. Quinn, let me ask you this, sir. Like, what’s the next real goal for you?
Doug Quinn APA (17:22)
Our goal is what it’s been all along. We want to make sure that those who break the law to cheat consumers on insurance claims are prosecuted. the problem is that there isn’t really parity in insurance fraud prosecution. Fraud happens on all sides. There’s no job title. There’s no race.There’s no geographical area or zip code that says these people are immune from committing fraud. There’s a certain percentage of the American population who is willing to commit fraud for a profit or to avoid a loss. So it doesn’t matter whether you’re hiring a contractor or an insurance company adjuster or engineer or a congressman or a senator for that matter, that percentage of the population comes along with it. So there’s no job title that’s immune, but the very fact
that almost all fraud prosecution in America is done to defend insurance companies and almost never against those in the insurance industry is a concern because we know fraud happens on all sides and we’re just looking to make sure that it is enforced equally on all sides that the consumers whose taxes pay for the prosecution units and the law enforcement whose premiums
pay for the insurance company’s SIUs. Every insurance company has what’s called an SIU, a special investigation unit. It’s like a detective bureau. ⁓ So, you know, if you have a $200,000 house and it catches fire and you say your $400,000 Lamborghini that was in the garage burned and it doesn’t make sense, the person in the claims department will red flag that and send it to the SIU and they will investigate it. And if it looks like fraud was committed, which
absolutely happens. ⁓ People that don’t, that wouldn’t return a library book late have no problem letting the insurance company do extra work, ⁓ pay extra money for their home to be repaired that they may not deserve, let the mechanic do extra work on their car, even though it might even pre-existing damage or mechanical problems. ⁓ And that costs all of us. That’s wrong, right? All fraud is wrong. All fraud should be enforced, but it happens the other way around.
There’s many vendors that the insurance companies hire because of what we call check writer bias. It’s part of their value proposition. Hey, we’ll keep claims down. And they are in many cases shaving down. We’ve caught them red handed shaving down claims and cheating people 70, 80, 90 percent sometimes and shorting people on claims. And there’s people from the insurance industry, know, the companies themselves that are actually cutting down on claims because of
maybe the way they were trained to do it, maybe because of financial pressure. So we want to make sure that consumers are protected because in the end, we’re the ones that’s paying for it. You know, you have to understand, you know, anytime you see an insurance company with an SIU or, you know, you’re paying for that. Anytime you see those TV commercials, that’s your premium money paying for that. And all of those campaign contributions and lobbying money, remember insurances,
one of the top lobbying industries, one the top spenders on lobbying in America. That’s your money. It’s not necessarily being spent for your benefit, it’s being spent for the insurance company’s benefit. ⁓ And again, look, if that’s the way they want to do business, if they pay honest claims, it’s all good. But it’s when the average consumer is getting cheated on a claim and not getting paid out what they bargained for, what they’ve dutifully paid premiums for.
and you know for years and sometimes decades then it becomes a problem and when the law is broken in order to short them on that claim then we need to make sure that our regulators and our law enforcement are stepping in and making sure that there’s legitimate investigations and prosecutions even though the insurance industry might be funding their boss’s campaign.
Quentin (21:38)
Listen, Mr. Douglas, thank you so much. I thank you for your perspective and your lens, something that maybe we have never realized how much of an impact it can have within this real estate landscape. But I thank you for connecting the dots and helping us understand that this is affecting what we do, how we’re trying to make money, how we’re trying to make a living. So ⁓ listen, before we wrap.If someone wanted to reach out to you, connect with you, I’m not sure if there’s a collaboration to be made, but they wanted to collaborate. Like what’s the best way for them to reach out to you,
Doug Quinn APA (22:10)
There’s always a collaboration to be made because in the end, this is a fight for justice for average Americans, for the businesses that are watching your show, and for the American economy. And it’s just the type of thing that we all need to join together and stand up for justice. So you can reach out on our website. It is apassociation.org. That’s alphapapaassociation.org. ⁓ And certainly reach out and get contact with us if you want to become apart of what we’re doing and jump on the team. If you just want to maybe go about your business and maybe provide some funding that we can stand up for justice, that’s okay as well. Or if you want to roll up your sleeves and get in the trenches with us and fight for justice, we’d love to have you.
Quentin (22:56)
is Mr. Douglas Quinn. Sir, thank you so much. Thank you for your time. Thank you for your story. Thank you for your perspective. Thank you for sounding an alarm and even making us aware of something that some of us may not have been even aware of and the vantage point some of us never even thought about it. So I just want to take a time again just to thank you for being here and sharing.Doug Quinn APA (23:16)
Thank you for having me.Quentin (23:17)
Absolutely. Now to everyone else, listen, go ahead and subscribe. Listen, we keep giving you amazing stories from amazing people, amazing perspective, amazing lenses that you might have never thought about or seen through that perspective lens before. And so make sure you subscribe because we’re going to continue to bring you this amazing content. So again, thank you, Mr. Douglas. And to everyone else, we will see you on the next time.
