The insurance industry’s response to Hurricanes Katrina and Rita has been “too slow” and the job of adjusting claims is a long way from being completed in the view of the leader of the nation’s largest agents association.
William Stiglitz, president of the Independent Insurance Agents and Brokers of America, also said the recent catastrophes have exposed major problems with the federal flood insurance program that his organization has taken a lead in getting fixed.
“The sheer magnitude of this disaster has made it a very difficult process,” Stiglitz told a meeting of the Connecticut chapter of IIABA. “There were not enough adjusters; there are not enough adjusters. They are still hiring adjusters, I understand, and doing it with really quick training to get them out there.”
He said he has been a “little disappointed” in the industry’s response and that the process to deploy a sufficient army of adjusters “has been too slow.”
He acknowledged that adjusting claims under the current circumstances is not easy.
“The total devastation has made it even difficult to find locations of houses and then much less try to find the insureds who might be scattered across the country,” noted Stiglitz, who is an independent agent in Louisville, Kentucky with the agency of Hyland, Block & Hyland Inc.
He cited figures that he attributed to the American Red Cross that as many as 680,000 single family homes in the Mississippi, Alabama and Louisiana were damaged by the hurricanes. “That’s an incredible number – almost three-quarters of a million homes destroyed. And we’ve got to try to adjust them. So I think we’ve got quite a lot of work to do.”
Part of that work relates to flood coverage. Among other lessons, the hurricanes exposed “real deficiencies” in the National Flood Insurance Program, according to Stiglitz.
He claimed his association has been alone in representing independent agents in trying to obtain improvements in the flood program. The association developed a set of 22 recommendations for improving the flood program.
Stiglitz suggested IIABA’s efforts were instrumental in the recent House committee approval in three days of an NFIP measure that would increase the maximum residential and commercial coverage limits, as well as provide additional living expense and business interruption coverages that are not currently available. The House-backed reform would also make flood coverage mandatory for more property owners and “put some teeth” into loss mitigation efforts.
“It’s a very aggressive stance we took with this. I will tell you that IIABA was the only agents association at the table. As a matter of fact we were about the only organization, period, in Washington that pushed for these reforms and as a result we’ve already got a bill out of committee. I think it’s incredible.”
He credited the IIABA’s national staff and lobbyists, along with the group’s growing $1 million political action committee, InsurPac, for adding to IIABA’s clout in Washington on this and other federal legislation.
He said IIABA has been “totally responsible” for representing agents not only on the NFIP but on renewal of the Terrorism Risk Insurance Act as well.
“If you think you’re getting any type of representation from another group, you’re not,” he told IIAC members.
When asked, Stiglitz declined to name the other agent group he was referring to; however, there have been recent spats between IIABA and the National Association of Professional Insurance Agents.
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