For many victims of the storm, a long wait for insurance payouts

RACELAND, La.— Nearly six months after Hurricane Ida lifted the roof of Brett Gabriel’s house, filling it with rainwater, rebuilding was largely out of reach for the day of the storm.

Making the home livable for Mr. Gabriel and his wife would cost more than $150,000, according to a tuning expert he hired. But after his insurance company sent in its own adjuster to check for the damage, it offered just $21,000 — enough to replace the roof, leaving $6,000 left.

Mr Gabriel, who slept in his home for months after the storm, said the policy was “regarded as a safety net, even when he developed a cough and headache that he blamed on black mold”. climb the wall. Although the state provided them with a travel trailer in January, they said it wasn’t large enough for them to sleep comfortably and they still spent the day in their dilapidated home.

At the small church a few minutes away, where Gabriel serves as pastor, virtually everyone in the church with homeowners insurance has had the same experience, he said.

“We can end each other’s stories,” he said.

He tries to encourage patience, but his health is thinning.

“How do you rest? How do you get some kind of peace? Mr. Gabriel said, adding, “It’s like we’re stuck in purgatory.”

As hurricanes, floods and fires ravage homes across the country with increasing intensity, homeowners increasingly face disaster after disaster: a battle with insurance companies that drags on for days. months or even years for rebuilding funding.

There is little corroborating data on whether an increase in extreme weather and natural disasters has prompted insurers to find more ways to opt out.

But residents, lawmakers and advocates say delays and underpayments are increasingly common, with insurers often sending inexperienced adjusters and engineering firms due to The nominated company has a much lower damage estimate than it would cost to repair – especially labor and supply costs. has increased sharply.

Mike Fesi, the Republican state senator representing the Louisiana county hardest hit by Ida, estimates that about half of his insured voters have experienced delays or lower payments.

“I don’t know what the deal is – whether they did it on purpose,” said Mr. Fesi, who has been delayed with his insurance claim. “I don’t want to think that’s the case.”

But as insurers face near-record losses from consecutive hurricane seasons as well as disasters like wildfires in the West, some are seeing more than just random problems.

Doug Quinn, executive director of the Policyholders Association of America, a watchdog that he says regularly receives complaints from both policyholders and industry employees, said: “What We see it there, I see it all over the country.

The organization recently filed criminal complaints against two Florida homeowners whose homes were damaged by Hurricane Irma in 2017, alleging U.S. Property & Casualty Insurance Company denied and paid short. The Policy Owners Association said the complaint could represent the experiences of thousands of hurricane victims. The company, which said it has yet to resolve the complaint, declined to comment.

Insurance industry representatives say companies have paid out huge sums in the wake of disasters in recent years: Insurers are expected to issue more than $20 billion in loss claims properties for hurricane-affected Louisianans in 2020 and 2021. With so many payouts and such massive losses, delays said Mark Friedlander, communications officer for the Insurance Information Institute.

“When there is a catastrophic loss of this magnitude, you will have homeowners who are certainly not satisfied with the way their claims are handled,” he said.

The majority of complaints are being handled quickly, Mr. Friedlander said. industry data shows that 83% of Hurricane Ida claims have been “closed” by the end of the year.

But that data paints an incomplete picture, according to Jim Donelon, Louisiana’s insurance commissioner, whose office collects and publishes the data.

“It’s the opinion of the company, it’s not necessarily the opinion of the policyholder,” he said of the term “closure.”

Across southern Louisiana, delays have not only affected rebuilding – with many hurricane victims still living in hotels or in trailers in their yards – but also displaced some people. other.

“That’s what they hoped for: that you just throw your arms around,” said Lynn Lewis, who eventually began rebuilding her home in LaPlace, a suburb of New Orleans. . “A lot of people have just left these houses. It will become a ghost town,” she said.

Kerry Andersen of Lake Charles said she was given a fraction of what she needed to rebuild after Hurricane Laura in 2020 after nearly a dozen adjusters and engineers were hired by her insurance company. Consider the damage. In January, she finally decided to sell her home at a huge loss.

“It’s a loss on another level because you also lose your community,” said Andersen, who has been commuting between rental apartments in Baton Rouge and New Orleans since the hurricane.

Mr. Friedlander said most of the problems were with smaller, regional insurers, which he said “don’t have the bandwidth of a large national or mega-regional insurer to effectively handle a single carpet.” disaster like Ida.” Three smaller carriers in the region have defaulted on loans in recent months, beginning to transition to state-accepted status.

But advocates say they hear about similar problems from policymakers to companies large and small. More than 450 claims were filed by Hurricane Ida victims with the Louisiana Department of Insurance against State Farm, the state’s largest insurance company.

Roszell Gadson, a spokesman for State Farm, says the majority of complaints about recent hurricanes in Louisiana have been resolved. “We are committed to treating each claim with care and care, and respecting the coverage outlined in the policy,” he wrote in an email. For hurricanes in 2020 and 2021, “State Farm paid out more than $2.5 billion on more than 140,000 claims received from our Louisiana customers,” he added.

According to Mr. Donelon, claims against insurance companies may represent only a small fraction of those experiencing problems.

“Most people get into situations where they believe they will get an objective assessment and that they will get what they are entitled to – and that is the biggest misconception.” Ted Patestos, a Texas-based adjuster with Smart Claims Public Adjustment who was hired by Mr. Gabriel to assess damage to his home. “I’ve yet to see a single person get insured without paying extra.”

Most others – who don’t know about public adjusters, or don’t have the time or resources to fight with their insurance company – just accept their carrier’s offer .

“It was a war of attrition,” said Mr. Patestos, who left his job as an administrator for a regulator hired by insurers after Hurricane Laura in August. 2020 because he disagreed with his and his colleagues’ question. to handle cases.

Proponents and experts say underpayments and late payments, while not new, have become more common after hurricanes Katrina, Ike and Rita caused widespread damage. on the Gulf Coast in 2005 and 2008.

“It’s become more complex and much more staged and much more standardized,” said Jeff Raizner, an attorney who has handled insurance lawsuits for 30 years in Texas and Louisiana. “They have been very creative in responding to increased environmental risks to reduce their own risks.”

Paul Newsome, managing director and senior research analyst at Piper Sandler, an investment bank, said companies are struggling to keep up with the ongoing losses.

“Most insurance companies I don’t think are trying to deceive customers,” Mr. Newsome said. “But they weren’t trying to be generous either.”

“The underlying business is so unprofitable,” he added, “they simply cannot afford to be more generous than they are obliged to.”

And, he said, some policyholders only realize once disaster strikes that the policy they’ve purchased isn’t enough. “Who is the right person to read the contract? No one does until their loss occurs. ”

At the same time, many customers are finding it difficult to afford insurance as insurers, facing diminishing returns, have increased premiums and deductibles.

The experience of homeowners after hurricanes Laura, Delta, and Zeta hit southwestern Louisiana in 2020 prompted lawmakers to propose a series of bills by 2021 to control the behavior of insurance companies. dangerous.

But the insurance industry, a powerful part of the Legislature, has struggled with many of the proposals, and very few of them have passed intact. The proposed $10,000 penalty for non-payment within 30 days of receipt of the field adjuster’s report has been reduced to $2,500.

But now, with struggles unfolding identically in more populous and politically powerful southeastern Louisiana, the bill’s proponents hope that they can be more successful in the legislative session. Upcoming. At a committee hearing on insurance in December, lawmakers on both sides expressed increased frustration and call for reform.

Although Mr. Donelon, the state insurance commissioner, said Louisiana could be more aggressive in regulating the industry, he also said the state should be cautious to avoid completely driving insurers out of the market.

“We are charged – every state is charged – for making insurance affordable and available,” said Donelon, a Republican. “And we can kill the goose that lays the golden eggs in the process of over-control.”

But others say concerns about pushing insurers out are misplaced.

“What they’ve put people through – they shouldn’t have their policies if they can’t get them all in on time,” said Dustin Granger, who unsuccessfully ran for a state Senate seat in the west. South Louisiana last year with insurance reform as one of the key issues of his campaign. “If you can’t do the business right, that’s not really insurance.” For many victims of the storm, a long wait for insurance payouts

Fry Electronics Team

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