This edition of Insurance Regulatory Law includes links to information and resources for people affected by Superstorm Sandy last week.
For some homeowners, the aftermath of Hurricane Sandy could bring a whole second round of troubles. After the storm passes, they may have to negotiate with their insurers to get the cash they need to repair wind and water damage.
Homeowners' insurance companies have gotten tougher as weather has become more cataclysmic. They've raised rates, carved out some coverage and tucked in new wind and hurricane exclusions and deductibles.
Homeowners need to play the game right if they want to get claims paid quickly and thoroughly. You can start early - here's what to do now and later.
New York homeowners will not have to pay potentially debilitating hurricane deductibles on insurance claims stemming from damage caused by Sandy, Gov. Cuomo said Thursday.
The New York State Department of Financial Services has informed the insurance industry that hurricane deductibles should not be triggered for the Superstorm, which will prevent coastal homeowners from having to pay deductibles in their insurance policies, Cuomo said.
Is there a way to get your Sandy-related insurance claim fast-tracked for approval?* * *Insurance-industry experts say a degree of waiting is inevitable after a storm of Sandy's size and scope, which resulted in damage that has been estimated at anywhere from $7 billion to $50 billion. In Sandy's case, the claims could be especially time-consuming to process because it won't always be clear if the storm damage is wind or flood-related...* * *But there are certain steps policyholders can take now to ensure they aren't at the end of the claim line, experts say.
For starters, they need to hurry up and get their claims in.* * *Making the call is one thing; providing the right information is another. The latter is key to speeding up a claim, experts say. If a homeowner can provide details of the damage, both to their property and possessions, he will essentially be making the adjuster's job easier.
Before-and-after photographs, purchase records and contractor estimates for repairs are especially valuable. It isn't that the adjuster will take everything at face value, but it gives him a reasonable starting point.
There are some important tips for policyholders when dealing with an insurance claim. First and foremost, the insured should promptly give notice to the insurance company of the loss. Many insurance policies require notice, and the policies usually use language saying the notice should be quick.* * *Save all receipts incurred with the loss. First-party property insurance many times requires the policyholder to "[t]ake all reasonable steps to protect the Covered Property from further damage, and keep a record of your expenses necessary to protect the Covered Property..."* * *Be prepared for the insurance company to send a representative to inspect the property. This person may be an employee of the insurer or an outsourced representative.* * *It is critical to thoroughly review your insurance policy. Yes, it will read like Greek to many people. But certain critical conditions required in the event of a loss are usually much easier to understand. Furthermore, many insurance policies contain deadlines that must be followed.* * *The first offer to pay your claim by the insurance company does not have to be the last. Many times the insurance adjuster is low on the claim valuation.* * *You should consider obtaining your own estimates and if they are higher than the insurer’s, then negotiate with the adjuster.* * *In short, ensuring you protect your insurance claim will take extra time. While trying to deal with the actual loss, many people put the insurance aspect on the back burner, but that can be highly detrimental. Attention has to be paid to the insurance claim from day one, and that starts with reviewing and understanding your insurance policy.
Insurers up and down the east coast have already logged tens of thousands of claims. The Consumer Federation of America has estimated that there will be hundreds of thousands of claims filed before all of the basements are pumped and the roofs are replaced.
Even though thousands of extra adjusters have been out fielding those claims in the most distressed states since the storm hit, it’s going to take a long time before every homeowner and renter sees an insurance adjuster up close and in person.* * *Some customers may be forced to wait because insurance companies are slammed. In some cases, they can’t get into the most affected neighborhoods. In others, they are simply doing triage, and sending their adjusters to the most dramatically damaged homes.
"We prioritize by severity of damage to properties on a case-by-case basis," said Nicole Alley, a spokesperson for USAA. She said her company had roughly 500 adjusters working on claims that had reached 25,000 by mid-day on Thursday. By late afternoon on Friday, that number had risen to 31,000, with 2,000 claims filed in two hours.
A State Farm spokesperson said her firm had logged more than 50,000 claims by mid-afternoon on Thursday.
USAA landed its mobile catastrophe van in a Breezy Point parking lot on Friday – right next to a trailer from MetLife and a van from Liberty Mutual.
Their top priority: homes that are uninhabitable, so that the owners can get emergency funds deposited to their bank accounts the same day (or the day after) for food and shelter.
Matthew Stewart, a total loss expert for USAA, which primarily serves members of the military, predicted that the insurer will be in the area with claims adjusters through November, and possibly into December.* * *
Insurers will be dealing with a crush of claims in the aftermath of Superstorm Sandy which inflicted billions of dollars in damages. Once homeowners can assess the extent of their personal losses, many will have to brace for another ordeal: navigating the insurance claims process.
Preparation and planning well before a storm arrives can help homeowners avoid potential pitfalls. But how they handle the details when it comes time to file can help ensure receiving an adequate payout.
Here are six tips to weather the claims process...
It is unclear if claims from Sandy, which delivered a wallop to the Northeastern United States earlier this week, will exceed the $3.7 billion the National Flood Insurance Program can spend before Congress needs to authorize more funds.
The largest private provider of policies for the flood program said on Thursday it expects Sandy will be the second-worst insured flood loss in U.S. history, behind only Hurricane Katrina in 2005.
That disaster, with $17.7 billion in claims, plunged the program into debt that the government has acknowledged may never be fully repaid from premiums.* * *Critics of the program complain that it subsidizes people who live and build in dangerous and environmentally sensitive flood zones from the coasts to the Midwest.
So far budget-focused lawmakers have been careful to not openly attack the program. But once Sandy's flood damage is tallied, there could be renewed calls for subsidy cuts if the Federal Emergency Management Agency has to ask for permission to borrow more money to run the program, which would add to its already hefty debt of close to $18 billion.* * *Standard homeowners' insurance does not cover flooding. The government set up the NFIP in 1968 to provide affordable insurance, impose flood management policies on vulnerable communities and reduce federal disaster aid costs.
The NFIP provides coverage through roughly 80 companies that sell policies and collect premiums on the government's behalf for a fee. The premiums go to FEMA.
In recent years, with severe hurricanes in 2004 and 2005, premiums have not met claims costs, forcing FEMA to borrow money.
It is too early to tell whether Sandy's flood damages will exceed the program's resources. Wright Flood, the largest private provider of policies for the program, is getting about 3,000 claims a day so far, said Patty Templeton-Jones, the company's chief operating officer. That will only rise as people start actually getting back to their houses.
In total, she said FEMA is expecting claims on at least 80,000 policies after Sandy, about a quarter of which Wright will handle.
