Fraud Allegations Against California Insurance Company

When insurance companies commit fraud, their customers suffer. Though the customers have done nothing wrong, but they are hurt by the company’s bad acts and often are cheated out of getting the insurance protection and coverage they diligently paid for over the years.

The news was about an insurance company, Hamilton Brewart Insurance Agency, which was part of the Upsala business community for decades. The founder, Hamilton Brewart, donated money to numerous charities and for public service projects at the local fire department. Until recently, it had seemed like a healthy company. In 2009, agents at Hamilton Brewart sold policies worth $90 million, which influenced Insurance Journal’s 2010 ranking of the insurer as the 95th best privately held property and casualty insurance company in the United States.

In a massive reversal of fortune, the company has now been sued by Universal Bank, based in West Covina, accusing the insurance company of asking for at least $6 million in phony loans. Universal Bank alleges that the son of the man who founded Hamilton Brewart, Derek Brewart, confessed to fraud personally during meetings. The founder, the elder Mr. Brewart, died earlier this year, leaving Derek in charge of the company, and his legal team claims the company was already in shambles by the time he inherited it. It seemed that the company had a darker side and there were problems below the surface, regardless.

The fraud scheme was allegedly linked to how Hamilton Brewart conducted business. It operated as a brokerage, selling other carrier’s policies. The business also obtained loans, referred to as “premium financing” in the insurance industry, to help customers buy policies. Then, the customers would make premium payments spread over time to pay back those loans. The lawsuit claims that Hamilton Brewart took advantage of the process by applying for loans for customers who did not need them. In this way, it is alleged that the company received more than 80 fake customer loans totaling more than $6 million, as noted above.

Now, a judge in Los Angeles has placed the insurance company into receivership. Another Los Angeles firm, Grosslight Insurance, bought a portion of Hamilton Brewart’s business portfolio and hired a few of its agents. Additionally, aside from Universal Bank, another company is suing Hamilton Brewart. The company’s own insurance provider, Endurance American Specialty Insurance Company, sued them in federal court, as well, desiring to cancel their professional liability coverage for failure to provide accurate information.

The founder of Grosslight has promised that if a customer is transferred to their company, he “guarantees they’re not going to get hurt.” This is good news as far as it goes, but when insurance companies perpetrate these types of scams, most often it is the individual consumer who suffers – through no fault of his own.

San Francisco Insurance Attorneys
If you are having an insurance problem and feel like your insurance company is denying you the benefits you deserve and paid for, contact an insurance law attorney in your area today. An experienced insurance attorney can help you understand your case and what legal avenues are available to you.