While insurance companies have paid out more than $1.1 billion for losses stemming from the May 22 tornado that devastated Joplin, Mo., regulators say that timelines contained in some property polices are hampering policyholders’ ability to recover.
The Missouri Department of Insurance said some insurance companies are putting unreasonable timelines on Joplin homeowners trying to rebuild. The department has issued a bulletin to the industry saying many home and business owners can’t be expected to rebuild within the time limits required by some homeowners and commercial insurance policies.
Insurance Department Director John M. Huff said the unprecedented scale of the Joplin tornado delayed many consumers from accessing their property and led to a temporary building moratorium. In addition, the widespread devastation left the Joplin area with a shortage of contractors and materials. Huff said this has made it impossible for many property owners to rebuild within six months, which some insurance policies require before paying full benefits.
Some insurance companies have already extended their time limitations, but others have not, the department reports.
The department’s bulletin noted that the application of some policies’ shorter time limitations could result in an unfair settlement, which is illegal under Missouri law. The bulletin issued by Huff says insurance companies attempting to enforce deadlines of less than one year may face legal action by the department.
“The insurance industry has done a commendable job responding to the tornado, having paid more than a billion dollars in claims so far,” said Huff. “At the same time, Missouri law requires insurers to provide prompt, fair and equitable settlements to their policyholders, and rigid deadlines may violate that law.”
Insurance companies have paid more than $1.1 billion in homeowners, auto and commercial property claims related to the Joplin tornado. Huff expects that number to approach $2 billion by the time all claims are settled. Policyholders have filed nearly 18,000 insurance claims.
More than 7,500 residential dwellings were damaged by the storm.
Source: Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP)
Topics Homeowners Missouri
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