For insurers, storms bring challenges
For area insurers, the time before and after a storm can be very hectic as policy holders call with what-do-I-do questions because, for many people, it’s the first time they’ve had to file a claim.
As Hurricane Irma came and went, that’s exactly what area insurers have been faced with and will continue to face in the short-term and, perhaps, much longer.
Thankfully, the storm didn’t unleash the destruction it could have, at least in the Cape Coral area. But there were still many homes that sustained some sort of wind and/or water damage, making for some long days for agents.
In the time before the storm, John Gardner, of Lee County Insurance Services in North Fort Myers, had very heavy call volume, the vast majority of calls from people who didn’t have insurance and wanted to purchase it at the last minute. They soon found out they were out of luck.
“What’s very disheartening is probably 90 percent of the calls are from those who have not had insurance in the past and now that they have a known loss, they try to get it,” Gartner said. “That’s contrary to the way insurance works. But most of the calls have been for help.”
Gardner said there is typically no wait for homeowner’s coverage, while flood insurance has different waiting periods. If it’s a closing, you can get it then. If you own the house, the wait can be three days with flood programs or even as long as 30 days.
Mark Pollock, of Freedom Insurance of Cape Coral and Fort Myers, said in the two weeks before Irma after all the flooding the previous week, there was heavy call volume from people wanting to buy flood, home and rental insurance in response. Few, but some, got lucky.
“We had a private flood company willing to write certain flood policies in certain areas. There was a five-day waiting period, and we were able to get some a policy,” Pollock said. “Most, though, we could not help.”
In the time after the storm, many insurers were on the phone with customers helping them go through the process of dealing with insurance companies and filing their claims.
Pollock said call volume is very high, many of them asking who to call to file claims, what their deductibles are and asking general questions about what’s covered and what’s not.
“If they only have screens torn from their pool cage or food that spoiled in their refrigerator, the standard deductible is 2 percent. On a $400,000 home, that’s $8,000. In no way will they meet their deductible.” Pollock said. “We’re talking people through the math and encouraging them to report the claim in case there’s hidden damage.”
Pollock suggests people take photos of everything and, if carpeting needs to be removed to remove it so mold doesn’t set in. If they have to do something, he said to keep receipts and do what they need to do.
Gardner said this has proven to be the biggest stress test for the industry as a whole, with this being the first big storm that Citizen’s, the so-called insurance of last resort, has faced, as well as the many new insurance companies that have popped up since Charley in 2004 after many of the traditional companies took off.
What type of protection they’ll get, especially from Citizen’s with its high deductibles, may leave people disappointed, and having to pull money out of their own pockets, Gardner said.
“Citizen’s has more surplus than the other companies combined, but if people dig into their policy, nobody wants Citizen’s. There’s a need to get policies out of there not because of funding but because their coverage is lousy,” Gardner said.
Insurance companies may catch a break, as many of the newer homes made out much better in Irma than Charley in 2004. Pollock said the new building codes have worked.
“We’re not getting a lot of calls from people who lost their roof, which we saw with Charley. We’ve seen a lot less catastrophic damage,” Pollock said.
As for when things will settle down, Pollock said calls will come in two or perhaps three waves. The first wave is already happening and will continue for a week or so.
However, within three weeks, Pollock said another wave will come from those who haven’t seen their claims adjuster. Yet another wave could come after that from those who got their check, but nobody to do the repair.
“These are more difficult calls because they are dissatisfied with the level of service. And when they get their checks, there’s a shortage of labor,” Pollock said. “They’ll call to ask if I know a roofer or someone who can fix their screen enclosure.”
Insurers have felt the impact from Irma. As of Wednesday. State Farm had received 11,200 homeowner claims and 3,660 auto from the storm. The insurer also warned of AOB (Assignment of Benefits) where damages are inflated to the point where it borders on fraud. This could result in an increase in premiums for everyone else.
On Tuesday, Gov. Rick Scott directed Florida Insurance Commissioner David Altmaier to take action to provide additional protections to support recovery efforts as it relates to Hurricane Irma’s impact on Florida’s families.
Scott said he expects Florida’s insurance companies to expeditiously respond to policyholders quickly and to treat them fairly.
“It is critical that Floridians have every resource available to quickly recover. By providing additional protections for consumers, we are making sure that each family has ample opportunity to get their claims filed in a timely manner,” Scott said in a statement.
As for autos damaged by the storm, those are typically covered by your auto’s comprehensive coverage. Just be sure not to do anything to cause more damage.
If the water got above the floor boards, or the seats are wet, don’t try to start the car. The electrical system is the most sensitive to water damage, and trying the start the car could cause more damage. Open the hood and check the air filter, which is easy to find under the hood. If it’s wet, do not try to start the car. Report the loss to the covering insurer, and protect the car from further damage by covering any broken windows, etc.