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Thursday, September 29, 2005
Law - More on hurricane insuance claims
The Washington Post has a long article today headlined "Homeowners Wait for Claims To Be Adjusted: Industry Chokes on Volume of Work." Some quotes:
The one-two hurricane punch of Katrina and Rita has strained the insurance industry's ability to answer phones, investigate claims and get money into the hands of shattered survivors of the storms.Eaalier ILB entries on hurricane insurance-related issues may be found at: 9/16/05; 9/9/05; 9/8/05; ad 9/4/05. Although we don't have hurricans in Indiana, we do have tornados, and floods.Some 10,000 insurance adjusters are deploying in the Gulf Coast region to handle more than 1 million claims expected to result from Katrina and Rita. But their progress has been slowed by their inability to inspect houses in inaccessible sections of the disaster areas and by the sheer bulk of the claims.
Katrina-related claims are expected to total between $35 billion and $60 billion -- an industry record even on the low end -- and Rita claims could reach $7 billion.
Many policyholders will pick up a major share of costs for their uninsured losses, and down the road, insurance premiums are likely to be higher -- for less coverage -- particularly in the regions where the hurricanes hit.
An insurance industry spokesman said it was too soon to know the extent of rate increases. J. Robert Hunter, a former Texas insurance commissioner who heads the insurance section of the Washington-based Consumer Federation of America, said premiums in some parts of Florida rose between 10 percent and 25 percent after last year's four hurricanes. * * *
Gulf-area residents are getting a crash course in collecting homeowner's insurance, which can be arduous even in normal times. Insurance companies generally require policyholders to fill out a claim form, also called a "proof of loss" form; make an inventory of damaged items; and keep receipts from temporary repairs.
Some insurers pay small advances to displaced homeowners for living expenses even before they are able to inspect the property. State Farm Insurance Cos. says it sent out tens of thousands of $2,500 checks to policyholders who were subject to mandatory evacuation and were not able to return quickly to their homes. Lexington Insurance Co., an AIG unit, says it sends living expenses -- $1,500 or so -- via Western Union to all policyholders making a claim regardless of whether it turns out to be valid.
But for benefits to start flowing, insurance companies usually require a visit to the property by an adjuster, or claims investigator, who estimates the total damage amount, makes a ruling on the cause and sends the paperwork back to the home office for a final decision.
Posted by Marcia Oddi on September 29, 2005 07:43 AM
Posted to General Law Related