Florida’s Insurance commissioner made the news a little over a week ago when his testimony, which you can watch above, indicated some bewilderment about why so many claims are still open a year after Hurricane Michael struck Florida’s Panhandle. Over 18,000 claims are reported as open.
Reporter Lawrence Mower of The Tampa Bay Times reported:
But why those claims are still open is a mystery. Altmaier told senators that of the open claims, only 3,612 were open because of lawsuits.
By law, insurance companies are supposed to pay claims within 90 days.
But that requirement has so many loopholes that it’s almost meaningless. The three-month time span only applies after a claim is made, the insurer settles on how much is owed and then the homeowner agrees to that amount.
The law allows insurance companies to take months to provide an estimate.
Altmaier said he hasn’t seen “even an instance of a violation of that statute” after Hurricane Michael. And he said the state’s Division of Consumer Services has seen an “extraordinarily low” number of complaints after the storm.
The office has taken no action against insurers following the storm, with the exception of sending letters to two insurance companies reminding them to send claims payments to the correct addresses.
That was just one part of Tuesday’s presentation that set the stage for another round of bills favorable to the insurance industry.
Insurance companies have long complained about lawyers driving up the cost of claims, and lawmakers last year passed multiple laws favorable to insurance companies last year.
I can think of and know a number of reasons why claims are open. All you have to do is speak with people from the area with open claims or read the social media to learn why their claims are open. Here are some of the reasons:
- The claim is being paid properly and the construction and replacement is still ongoing.
- The claim has been denied in whole or part.
- The insurance company will not respond to the policyholder who is becoming increasingly frustrated.
- The insurance company and the policyholder cannot agree upon the value of the damage.
- The construction is messed up for various reasons and the insurance company is not paying money the policyholder claims is owed. Maybe the contractor messed up or maybe the insurer did not pay enough.
- The policyholder is claiming more than is owed and the insurer disagrees.
- The policyholders has not finished claiming everything owed for replacement cost because the replacement is not finished.
- A lawsuit has been filed for any number of reasons.
- An arbitration or appraisal has been filed by the insured or the policyholder.
- The policyholder, contractor or public adjuster has been accused of insurance fraud and the claim is denied.
I listed 10 pretty simple and common reasons that just about everybody knows are ongoing reasons for the claims to be open and not completely closed. I would suggest that the insurance commissioner or those in his office simply require insurers to list one or more of these reasons. He would at least know from those companies he regulates why they think their claims are open.
Maybe I should run for Chief Financial Officer and see if I can get such a list completed so these simple questions could be answered to our other elected leaders. I just do not understand why the reasons for open claims are a mystery. It is so obvious to those of us visiting with policyholders and speaking with insurance adjusters on a daily basis in the panhandle.
To be fair, many of the claims are open because there simply are not enough contractors to do the work in the panhandle. This has caused an increase in prices for construction and there are numerous disputes about the increased pricing for repairs. This is the same problem I see from the California wildfires where many per square foot prices for repair are in excess of $1,000. Where have all the qualified construction laborers gone?
Further, there is an insurance industry problem about the number of truly qualified estimators with adjustment authority to settle claims. The number of experienced general adjusters with enough line authority to settle claims in the field is lower than I have ever seen. Every adjuster seems to have to get authority to settle from a desk adjuster back at the Home Office that has never been to the loss site. This needs to change. It is causing delay, misunderstanding of the policyholder’s issues, and underpayment.
Florida policyholders are justifiably furious to hear that the Insurance Commissioner does not know why their claims are still open. I agree that the 90-day time frame has a huge loophole and most insurers simply ignore paying any interest on their delayed claims payments. There are other easy steps which could be undertaken, but this really is not a mystery to those of us involved with these problems on a daily basis throughout the country. All the insurance commissioner has to do is ask the people with the open claims. He will get an earful.
Thought For The Day
Part of being successful is about asking questions and listening to the answers.