Citing a “troubling” number of Hurricane Michael-related consumer complaints and claims denials, Florida’s top financial regulator is urging insurers to respond more quickly and adequately to consumers recovering from the major storm that devastated the Florida Panhandle in October.
Florida CFO Jimmy Patronis, who leads the Florida Department of Financial Services, called on the insurance industry to “step it up” in aiding consumers in their Hurricane Michael recovery in a conference call on Nov. 20 with more than 40 insurance company representatives and Insurance Commissioner David Altmaier.
“Before Hurricane Michael hit, I put Florida’s insurance industry on notice that I expected they would move quickly to help residents recover. Unfortunately, this hasn’t been the case all around,” Patronis said. “My office has noticed several alarming trends since the storm made landfall, including delays in processing claims. What is even more troubling is that 13 percent of complaints to my office were related to claim denials.”
Insurance consumer complaints are handled through the DFS Division of Consumer Services.
Patronis, who is originally from Panama City, Fla., compared the number of complaints related to Hurricane Michael at this point to that of Hurricane Irma, which touched almost every county in Florida when it hit in September of last year. He said approximately 30 days after Hurricane Irma, DFS had received approximately 200 consumer complaints. Hurricane Michael impacted a smaller area – just 12 Florida counties – yet DFS received more than 100 consumer complaints through the 30 days after the Cat 4 storm made landfall on Oct. 10.
“There is no reason that we should have this many complaints for an impacted area that is a small fraction of Irma’s. It’s completely unacceptable,” Patronis said.
Patronis added, “I expect insurers will step it up so that families and businesses can get back to normal. If insurers don’t step up, not only will recovery be delayed, but consumers will be even more vulnerable to fraud.”
As of Nov. 16, the Florida Office of Insurance Regulation reported a total of 125,356 claims for all lines of business, including residential and commercial properties. The total estimated insured losses had reached $3.4 billion with 55.3 percent of the total claims received closed.
Florida Insurance Commissioner David Altmaier echoed Patronis’ statement to insurers saying, “all insurance-related needs held by impacted consumers must be addressed swiftly and without delay.”
For their part, the insurance industry says they were there as soon as possible after the storm and are still working to resolve claims.
“Hurricane Michael brought a great deal of devastation, and insurers are working diligently to settle claims quickly and thoroughly,” said Logan McFaddin, regional manager for insurer trade group PCI. “As soon as it was safe to enter, adjusters were deployed across the impacted areas … Insurers are actively working with policyholders on alternative housing needs and processing and paying claims for home, auto, and business[es].”
In the days following Michael’s wrath, the majority of affected policyholders reported being pleased with their insurance carrier’s response, according to a survey of insurance industry performance after Hurricanes Florence and Michael from J.D. Power, which found 87 percent of Florida policyholders said their insurer had “met or exceeded expectations,” in its response efforts.
The J.D. Power Pulse Survey was conducted between Oct. 19 – Nov. 2 and included 650 responses from individual home and policyholders affected by Hurricane’s Florence and Michael across four states: North Carolina, South Carolina, Florida and/or Georgia.
The survey found 89 percent of respondents reported that their claims had either been fully or partially covered, with 5 percent reporting their claim was unresolved. Just 4 percent had their claim denied and 2 percent were “not sure.”
Trey Hutt, president of Hutt Insurance Agency, which has two locations in the Panhandle, said for the most part, he has been pleased with the industry’s response to Hurricane Michael.
However, he noted there is typically a lull in the recovery process about a month after the event where people have submitted their claim, had their initial visit from an adjuster and then have to wait to hear from a desk adjuster, which can take up to 10 business days in some cases.
“People are very nervous when there is silence at the other end of the phone,” Hutt said.
Altmaier said OIR continues to work alongside DFS to monitor the progress of the post-storm response to ensure residents impacted by Hurricane Michael are protected throughout their path to recovery.
“Insurance companies must fulfill the promises they’ve made to their policyholders,” Altmaier said.
McFaddin said that will be the case.
“Insurers will continue to be there until properties are rebuilt and Florida communities return to normal,” she said.
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