An Update from the Personal Insurance Federation of Florida
The Personal Insurance Federation of Florida (PIFF) today released the following statement and background information related to Hurricane Michael insurance claims. Today at 11 a.m., the Senate Banking and Insurance Committee will convene for a workshop on Hurricane Michael claims and the state of the domestic property insurance market.
Michael Carlson, CEO and president of the Personal Insurance Federation of Florida:
“One year since category 5 Hurricane Michael, packing 155-mile-per-hour winds, threw the people, land and economy of northwest Florida into disarray, the wounds are still fresh. Recovery will take years.
“The residents and communities in the affected areas need our continued help. And if there is some good news, the numbers show the vast majority of claims are resolved.
“Claims should be resolved promptly whenever possible. It is also important to understand the potential barriers that force a claim to go beyond the 90-day ‘prompt pay’ period. A claim may remain open if the homeowner cannot find a contractor to perform repair work or if they are waiting to pay a vendor. The Panhandle needs help rebuilding. There is more demand for repair work than there are available contractors and other tradesmen. A lack of engineers and other specialists to help evaluate and estimate damages can also lengthen the time it takes to close a claim. In the case where you cannot remain in your home and need living expenses from your insurer while your home is being rebuilt, the claim may remain open.
“While the existing open claims are being resolved, we know claim filing does not stop when the wind stops — new claims from Michael may continue to come in up to three years after the event. We will keep our commitment to rebuilding Northwest Florida. That work will not be complete until every Hurricane Michael claim is resolved.”
Background:
- To date, according to the latest data released by the Office of Insurance Regulation:
- Approximately 150,000 Hurricane Michael claims filed after the storm made landfall, and new claims are being filed every day.
- The vast majority of claims have been resolved: 88 percent.
- Insurers have paid out almost $7 billion in claims to Floridians recovering from the storm.
- Of the 150,000 claims, 17,000 of them remain open or unresolved.
- It is important to clarify that nearly 10,000 of those unresolved claims have been “reopened” claims.
- A typical reopened claim occurs when the homeowner discovers damage that was not included in the original claim. For example, the homeowner may have filed a claim for roof damage, and then weeks or even months later discovered additional damage. In that case, the homeowner would contact his or her insurer to make them aware of the damage. This “reopened” claim is included with the original claim, making the claim appear to take longer to resolve. This common occurrence doesn’t reflect undue delay in the handling of the claim.
- The latest data also tells us a smaller amount of Michael claims — 3,300 — are being disputed.
- When a homeowner and an insurance company have a dispute over a claim, the homeowner may file a lawsuit. Litigation can delay final resolution for months or even years.
- Contributing to delays may also be instances of post-Michael Assignment of Benefits abuse.
- Florida law states that insurance companies must pay a valid, uncontested claim within 90 days unless there are factors beyond the control of the insurer that prevent such payment. [see 627.70131]. There are several factors present in the Hurricane Michael recovery effort which are extending the duration of claims.
PIFF is a member of the Consumer Protection Coalition, which is a grassroots organization whose goal is to educate policymakers on the problem of AOB abuse and to find sensible, pro-consumer solutions that will reduce costs. Learn more about the AOB problem and the Coalition at fightfraud.today.
About PIFF
The Personal Insurance Federation of Florida, Inc. (PIFF), is a leading voice for the personal lines property and casualty insurance industry in Florida. PIFF represents national insurance carriers and their subsidiaries, including many of the state’s top writers of private passenger auto and homeowners multiperil insurance. Together, PIFF members write more than $13 billion in premium in the state. PIFF advocates for a healthy and competitive insurance marketplace for the benefit of Florida consumers. Follow us @PIFFNews. Visit PIFF.net to learn more.
