State Farm: We're Paying Wind Damage Claims
Southeast News • April 7, 2006
State Farm Fire and Casualty Co. is paying for Hurricane Katrina property losses when evidence shows that wind caused the damage, James Burwell, claims manager, wrote in a letter to the ...
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Subject: Here's a Thought
Posted On: April 10, 2006, 2:09 pm CDT
Posted By: AD
Comment:
I can't say this is happening in all cases - it's just another way to look at the same issue.
Usually in a Cat the ins. companies tend to "over write" the estimates a bit - the idea being to get the claims closed as fast as possible without any supplements. (That's how we do it).
However, due to the number of claims and the amount of damage, insurance companies, esp the smaller ones, may not be able to financially survive Katrina. Perhaps - it's not a great scheme to mistreat and take advantate of customers - perhaps companies are just writting the estimates "tight" and then handling the additional damage on supplements. (which is not normally how Cat claims are done). That way, the insurers can try to stretch out their reserves. If the ins co ends up not having enough money to handle all the claims - at least they have given a little money to all/most policy holders with covered losses. Of course with the volume of claims they have there- handling claims this way will take longer.
I don't know that the large companies, like State Farm, are handling claims this way. But this may be the motivation for the smaller companies, who may not survive this financially. It's just a suggestion.
Subject: Here's a Thought
Usually in a Cat the ins. companies tend to "over write" the estimates a bit - the idea being to get the claims closed as fast as possible without any supplements. (That's how we do it).
However, due to the number of claims and the amount of damage, insurance companies, esp the smaller ones, may not be able to financially survive Katrina. Perhaps - it's not a great scheme to mistreat and take advantate of customers - perhaps companies are just writting the estimates "tight" and then handling the additional damage on supplements. (which is not normally how Cat claims are done). That way, the insurers can try to stretch out their reserves. If the ins co ends up not having enough money to handle all the claims - at least they have given a little money to all/most policy holders with covered losses. Of course with the volume of claims they have there- handling claims this way will take longer.
I don't know that the large companies, like State Farm, are handling claims this way. But this may be the motivation for the smaller companies, who may not survive this financially. It's just a suggestion.