After a Bronx family was scammed out of nearly $50,000 by insurance adjusters and contractors when their dream home was ravaged by a fire, Senator Jeff Klein has passed legislation to make sure that never happens again.
On Tuesday, June 11, the New York Senate passed legislation to protect homeowners from insurance scams by establishing a strict firewall between public adjusters and contractors.
Klein’s bill states that any adjuster who doesn’t actively work with the interests of the insured in mind could lose their license.
Before the new legislation, there were no laws preventing “independent” public adjusters from having a financial interest or motives in a contractor’s business.
That’s how the Marshfamily became the victims of a scam that began after the three generations of the Marsh family escaped unharmed from an April 2011 fire that gutted their Prospect Avenue home.
Chancy Marsh IV remembers the onslaught of public adjusters who showed up after the fire, with promises of getting the best settlement from the insurance company.
Marsh said he was referred by the Better Business Bureau to public adjuster Adjustrite for help with his insurance claim.
A public adjuster is supposed to be an independent agent fighting on behalf of the claimant.
When the adjuster recommended contractor Joseph Armato, Marsh assumed there was nothing but a professional relationship between the two.
After months of what Marsh described as incomplete and unsatisfactory work by Armato, the 40-year-old freelance photographer found himself out $20,000 — which was not covered by insurance — and paying a mortgage on a home he and his family could not live in.
According to Marsh, Armato left uncompleted plumbing, electric and carpentry work at the house.
“He removed water pipes and gutted the bathroom when he obtained permits to replace gas pipes!” Marsh said. “The debris in the yard was supposed to be removed as he received funds for demolition work. Mr. Armato has stated over and over to me that the electrical work is finished, however the pictures show otherwise.”
Marsh then discovered that Armato was one of the founders of Adjustrite, with the two companies sharing a City Island office.
According to a spokesperson for Senator Klein, Adjustrite has had more than 11 complaints in Westchester and the Bronx in the past few years and was fined $50,000 in 2009 by the State Insurance Department for operating without a license, as well as “improperly soliciting business.”
On Friday, June 21, the City Department of Consumer Affairs ordered Armato to pay the $20,000 to the Marsh Family. The agency also revoked his Home Improvement Contractor license and Home Improvement Salesperson’s license.
Klein’s legislation is named the Gayla Marsh bill, after Chauncy’s mother.
“Public Adjusters, by definition, should act on behalf of the public, not on behalf of their own pocketbook,” Klein said. “Unfortunately, we’ve found that this is not always the case. That’s why I’m proud that we passed legislation ensuring that homeowners get the protection they deserve. Families like the Marsh family, who brought this issue to my attention, will no longer be victims to this type of coordinated scheming.”
A spokesperson for Klein said they expect Gov. Cuomo to sign the bill shortly.
Phone calls made to Joseph Armato were not returned by press time.
Kirsten Sanchez can be reach via e-mail at firstname.lastname@example.org or by phone at (718) 742-3394