Expect low and slow claims payments if your insurer folds

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When a property insurer folds in Florida, customers with claims can expect a long wait for less money.

Since 2006, eight property insurance companies have gone out of business in Florida. More than 55,000 policyholders waited months and sometimes years for the Florida Insurance Guaranty Association to settle their claims.

The fund has 1,087 unsettled claims, 223 that it received four or more years ago. Some of those claims were filed years before the companies folded. It took 108 days on average to settle claims from the three property insurers that folded last year — 40 percent longer than it took to close claims for the five property insurers that went under from 2006 to 2009.

That’s longer than the 30- to 60-day delays FIGA says on its website that policyholders should expect.

Most Florida homeowners might think they don’t have to worry about how the fund, known as FIGA, works. But insurance industry experts warn that more insurers will go out of business if the state is hit by a major hurricane. That’s what happened after the 2004 and 2005 hurricane seasons.

FIGA tries to resolve claims against out-of-business insurers quickly, said Tom Streukens, the fund’s operations director.

But adjusters and other insurance experts say FIGA repeats much of the work done by the previous insurer. For instance, FIGA scrapped some or all of the work on 689 claims from two insurers that folded last year, Northern Capital and Magnolia.

“It wasn’t particularly cost-effective for them to start over, especially [because the contractors estimating damage for Northern Capital] in many cases charged significantly less than the FIGA” contractors, said Alex Blain-Cruz, a former vice president of Northern Capital…

To read the entire article go to Sunsentinel.com

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Sinkhole Rate Hearing Draws Crowds – And Results

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At roughly 3:30pm yesterday, hundreds of folks from Pasco and Hernando County descended on downtown Tampa for one singular purpose – they were fighting for their financial future. They were fighting to keep their homes.

I want to express my gratitude for everyone who attended the statewide rate hearing in Tampa yesterday.  I particularly want to thank the following elected officials who participated in yesterday’s activities in some way:

Senator Paula Dockery
Senator Mike Fasano
Senator Rhonda Storms
Representative Richard Corcoran
Representative Tom Goodson
Representative Rick Kriseman
Representative Darryl Rouson
Representative Jimmie Smith

Each of these officials offered powerful words in opposition to Citizens Property Insurance Company’s proposed sinkhole rate hike.  These officials stood in solidarity with the hundreds of citizens who showed up to speak out against the proposed rate hike.  I also want to thank the media for giving this effort the coverage it deserved.  Stories about the proposed rate hike dominated the news from early
yesterday morning until the late last night.

Insurance Consumer Advocate Robin Westscott is also to be commended for her strong comments at the rate hearing.  Not only did she stress the need to “phase in” whatever increases may be needed, she disagreed with the underlying rate increase request.  She did an excellent job for the people of the State of Florida.

While these officials spoke eloquently about the tremendous damage such a drastic rate increase would bring, the most passionate and effective testimony came from hundreds of ordinary citizens (Many bused in by Policyholders of Florida), who told the commission what these rate hikes would mean to them in real terms. They reminded the commission that they weren’t simply numbers on a page – they were real people struggling to stay afloat in a state facing a very real economic crisis.

I can tell you first hand that it was pretty powerful stuff. For those of you who were unable to attend the hearing, I put together a quick summary of the news coverage throughout the day.

ABC
Action News Noon cvg: Residents organize to fight sinkhole insurance hike http://bit.ly/pQRhy
ABC Action News: 2 videos (5 &
11pm cvg): Citizens defends rate hike request, hundreds protest http://bit.ly/qU2Fnn
FOX 13: 2 Videos
(5& 11pm cvg): Citizens faces public after rate hike request http://bit.ly/qTwL4m
CBS 10 News Noon cvg: Upset about
proposed sinkhole rate hike? Speak out | wtsp.com http://bit.ly/oWJaf9
CBS 10 6:00 cvg: Homeowners fight
sinkhole insurance rate increases | Video | wtsp.com http://bit.ly/qzIFAD
CBS 10 11:00 cvg: Hundreds of
homeowners fight sinkhole insurance rate increases | wtsp.com http://bit.ly/nUa1kj
NBC 8: Public hearing on homeowner’s
insurance | TBO.com http://bit.ly/r2Hzzc
Bay News 9:
Angry homeowners give insurance regulators an earful http://bit.ly/pDY5lz
Bay area residents rail against
sinkhole insurance hike | TBO.com http://bit.ly/oIoFul
Regulators to weigh Citizens
insurance rate hike | House Keys blog http://sunsent.nl/rs4Iyh
Citizens policyholders jeer
sinkhole rate hikes at Tampa hearing – St. Petersburg Times http://bit.ly/o8z5Ti
Citizens insurance takes a beating
over rate hike request | House Keys blog http://sunsent.nl/nhvtUw
Citizens Blast Citizens’ Rate Hike
Proposal | Sunshine State News http://bit.ly/nunl4n
5 things you need to know happening in
Florida on Tuesday, September 13 http://bit.ly/qBPVr1

We need to continue this momentum – not for our own glory, but for those faces we saw at yesterday’s late hearing. More than anything else, we need to remember our duty to fight for those most vulnerable and to hold insurance companies and the state accountable. This is a fight that is by no means finished – Let’s keep it up.

 

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Call: 888-443-4403
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Expect Delays With Claims

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If you are filing a claim under your homeowners policy because of Hurricane Irene or another loss, brace yourself: On major claims, it could take months to get through the whole process.

Depending on the type and severity of your loss, there may be an on-site inspection, such as to confirm the degree of water damage. If your home is unlivable, you may receive one initial check to cover temporary living expenses and then other checks down the line, says Paul Stachura, chief claims and risk-services officer for Fireman’s Fund Insurance. Keep track of expenses, such as hotel and meal costs, and save your receipts, says Joe Kovar, a certified public accountant in Danville, Calif.

If you have a small business, consider hiring a public insurance adjuster to assess the damage and organize your claim, which might include inventory and repair costs. The public adjuster negotiates with your insurance company and typically takes about 10% of the claim as payment.

If you aren’t satisfied with a proposed settlement from your insurer, argue your case to the head of the claims department before signing any release forms or endorsing the check, Mr. Stachura says…

 

To read the entire article go to WallStreetJournal.com

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Hurricane-related flood damage? Few homes covered

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Hurricane Irene is providing a painful reminder that the vast majority of homeowners insurance policies do not cover damage from flooding.

That’s a difficult reality for those who spent Monday cleaning up flooded basements, cursing failed sump pumps, or fixing other water damage.

Whether water damage is covered depends on how it came about. Standard homeowners policies cover structural and water damage when wind or a falling tree knocks a hole in a roof, or breaks a window, allowing rain to fall inside. But there’s generally no coverage for the home itself, or for personal belongings, when damage results from rising water. That includes water that seeps up from saturated ground through a basement floor, and homes near beaches flooded by storm surges.

When Irene hit the East Coast over the weekend, flood damage was greater than wind damage in most regions. Inland areas were among those hardest hit by rains that produced flash floods.

Yet many homeowners will be stuck paying all repair costs out-of-pocket, after claims adjusters conclude upon inspection that flooding was to blame, and therefore damages aren’t covered.

That experience could cause many to reconsider whether to buy a separate flood insurance policy in time for the next storm.

“Nothing sells flood insurance like a flood,” said Robert Hartwig, president of the industry’s Insurance Information Institute. “It’s always the case that we see a surge in flood insurance sales in the wake of a flood.”

A poll this year by the Institute found that just 14 percent of homeowners had a flood insurance policy. The lowest coverage was in a region hit by Irene: the Northeast, with 5 percent. The highest coverage rate was in the South, with 19 percent.

Coverage remains low despite court cases consistently upholding the industry’s denial of homeowners insurance claims involving damage from flooding, rather than wind, Hartwig said. A series of lawsuits followed in the wake of Hurricane Katrina, which hit the Gulf Coast in 2005.

Nearly all flood coverage is purchased through the government’s National Flood Insurance Program. Homeowners, renters and business owners in about 21,000 communities nationwide are eligible to purchase federally backed flood policies, typically through private insurers that market the coverage. Information is available at www.FloodSmart.gov .

The average flood policy costs around $600 a year, but can start around $129 in low-risk areas, according to the Federal Emergency Management Agency, which administers the insurance program. The average paid claim over the last five years was nearly $34,000.

In Vermont, just 3,673 flood insurance policies were in effect at the end of June, according to federal data. Yet the landlocked state was one of the hardest hit by Irene’s flooding.

Property owners who aren’t in high-risk areas file more than 20 percent of claims with the national flood program, and receive one-third of disaster assistance for flooding, according to FEMA….

 

To read the entire article go to Palmbeachpost.com

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Irene Could Revive the Wind vs. Water Debate

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From the vantage point of many, Irene’s blow was softer than anticipated. Nevertheless, the tropical storm left a trail of broken bodies—24 deaths have been reported—tree limbs, and frayed power lines in its wake, compounding an already record-setting year for catastrophe loss.

Indeed, I.I.I. President Dr. Hartwig’s pre-weekend storm loss projections will likely ring true, as preliminary figures point to between $2 to $3 billion—further inflating the year’s $18 billion in insured damages across the nation.

But for millions of East Coasters and the property and casualty (P&C) carriers that insure them, the scramble for exit routes amid paralyzed transit systems and post-evacuation inconveniences pale in comparison to the potentially massive implications of flooding, as heavy rains battered already saturated grounds.

In an interview on NPR’s “All Things Considered,” Dr. Hartwig explained that the affected areas are not accustomed to dealing with hurricanes. Moreover, unless residing in a flood plain, many homeowners likely will have not purchased flood insurance.

Standard homeowners’ policy coverage excludes loss resulting from surface water or groundwater entering the dwelling, and that does not bode well for residents with wet basements and sullied personal possessions. Outside those walls, crippled tree limbs pose a hardship for homeowners as well…

 

To read the entire article go to Propertycasualty360.com

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Advocate Claim Service, Inc.
“Advocating on behalf of the policyholder”
Call: 888-443-4403
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