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Hurricane Insurances In Florida

Date: Mar 18, 2005
Contributor: Louisa Swinehart

Insurers told to settle storm claims

Companies may face fines if they don't meet April 18 deadline

Gail Snook of Port Charlotte was happy to hear of a new state rule Thursday forcing insurance companies to resolve hurricane claims in 30 days.

The rule, approved by Gov. Jeb Bush and his Cabinet, means residents who went through one or more of Florida's 2004 hurricanes and still need to settle with insurance companies to fix their roofs, deal with mold and water damage, or rebuild their porches or homes, will see their lives return to some semblance of normalcy with closure of their claims by April 18.

The rule was proposed by Tom Gallagher, the state's chief financial officer as well as a Bush Cabinet member. Gallagher has heard the frustration of more than 2,000 homeowners whose claims are still open more than seven months after Hurricane Charley hit. An estimated 144,000 state residents attended three town meetings held statewide, the most recent in Punta Gorda in Charlotte County. The next meeting is Saturday in Orlando.

Insurance companies said the mountain of claims from the unprecedented four-hurricane slam of Florida, and a shortage of adjusters and personnel, helped cause the lag. But as Gallagher listened to hour after hour of residents' horror stories during town meetings, he ran out of patience.

Snook still has an outstanding claim to settle with Allstate Insurance company, but it's too late to save her home.

Snook and her husband had their residence insured for about $180,000, but received only $5,200 for living expenses from their company after Hurricane Charley pummeled their home Aug. 13.

Five adjusters later, wrangling over repairs continued and bills piled up — bills the Snooks couldn't pay. And they couldn't wait out the insurance company. So they sold their damaged home "as is," moved into a mobile home park and hired a public adjuster.

Snook was one of the estimated 500 residents who showed up

at last Saturday's town meeting in Punta Gorda and couldn't believe there were still so many residents and families with insurance claims open.

"I don't know anything about insurance and I don't know how this is allowed to happen. It would have to be something close to fraud, I think. It has to be injustice — giving you money to fix your house that isn't enough to do it — it just doesn't seem right."

There have been 1.6 million claims filed from the 2004 hurricanes. About 91 percent have been closed, meaning an estimated 144,000 are still open, according to the state Office of Insurance Regulation. The office doesn't break down the number of open claims by county, according to Valerie Beynon, office spokeswoman.

There is only a gap of about 5,000 between the total number of insurance claims made by Charlotte and Lee counties for hurricanes Charley, Frances, Ivan and Jeanne — 84,537 for Charlotte vs. 79,773 for Lee. However, the claim payments for Charlotte for all four hurricanes are $2.1 billion, much higher than Lee's $808 million. Part of the reason may be the fact Charley hit Charlotte harder than Lee, and the number of total loss claims for Charlotte compared with Lee's is nearly 8 to 1, or 8,954 to 1,941.

Under the emergency rule, outstanding personal residential claims and commercial residential claims that are not settled by the deadline will be reported to the state Office of Insurance Regulation by April 28, with a detailed explanation of why the claim was not settled.

The only claims exempt from the rule are those being litigated, mediated or recently opened, or claims awaiting loss estimates.

In addition to providing a detailed report on why they failed to close the claim on time, insurance companies also will be liable for penalties, Gallagher said.

Those penalties could range from a $500 fine per incident from the Division of Consumer Services, to suspension or revocation of a company's certification of operation in the state, he said.

Taking away a company's certification to operate is something Kevin McCarty, commissioner of Insurance Regulation has authority to do, but it would have to be an "awfully egregious" circumstance, said Bob Lotane, spokesman for the state Department of Financial Services.

But McCarty also can levy administrative fines at his discretion, depending on the severity of a particular case, Lotane said Thursday.

A breakdown provided by the state Office of Insurance Regulation on Thursday showed fines totaling $690,000, with a note that companies claiming exemptions from reporting were excluded from the list. The top three fines were levied against State National Insurance Co. Inc. ($57,500); Homesite Insurance Co. of Florida ($30,000) and Coop De Seguros Multiples De Puerto Rico Inc. ($27,500).

Snook believes insurance companies should be penalized for not following the rules.

"They should have to pay for this," she said. "You pay for your insurance, keep up your end of the bargain. How come they don't keep up theirs?"




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