Many Hurricane Irma insurance claims remain unsettled

April 13--A month and a half from the next hurricane season, fewer than 57 percent of more than 942,000 Hurricane Irma insurance claims worth $8.6 billion have been closed with insurance payments, state records show -- leaving folks like condo owner Martha Zuniga in Palm Beach Gardens with a roof she says needs fixing and a "horrible" feeling.

Now industry officials acknowledge it is possible they underpaid on tens of thousands of claims they declared closed after the September hurricane.

Florida's second-largest insurer, state-run Citizens Property Insurance Corp., said it has reopened more than one in three of its Irma claims, or more than 24,000, to review them as more information becomes available.

Citizens President Barry Gilway said at a board meeting Wednesday the company is proud of resolving claims in a timely and efficient way, but admitted some property owners from the Keys to mainland South Florida "feel abandoned and on their own, a dangerous combination that can lead to litigation and further delays."

Problems have been complicated by a scarcity of contractors to complete repairs in a difficult year, which can push up the market rate for fixing damage and cause claims to be revisited, he said.

He cast it as a challenge to increase "educational efforts" to inform consumers initial payments might not be the final word.

"In some cases, policyholders have incorrectly assumed that the initial payment was the only reimbursement they would receive for their claims," Gilway said. "As such, they have sought the aid of public adjusters or law firms who are more than happy to take their case."

When third parties get involved, it can inflate the cost of claims and drive up premiums for all policyholders, company officials say.

But why are so many claims declared closed in the first place, only to be reopened? A group representing public adjusters, who pitch themselves as working for consumers and not insurers, asserts insurance companies have plenty of incentives to make claims sound all wrapped up and hope policyholders accept it.

"The truth is many claims are timely paid and many other claims are grossly underpaid or not paid at all," said Florida Association of Public Insurance Adjusters president Jimmy Farach. He said a number of property owners "hear from their insurer that their claim is closed and they simply give up."

His group contends Cititzens "prematurely" closed many claims, but the state's last-resort insurer at least is grappling publicly with an issue that adjusters say is all too often treated with terse letters and unreturned calls at many private insurers. The adjusters association cites the case of a woman who owns a Boca Raton property where Florida's largest insurer, Universal Property & Casualty Insurance Co., paid her $500 and declared the claim closed, though a public adjuster found more than $21,000 in damages.

Universal disputed that account, saying the Boca Raton case might better serve as an "example of how some public adjusters prolong the claims process and take dubious positions for the purpose of driving up property insurance claims," according to spokesman Travis Miller.

After several requests, he said, Universal "only recently received information from the public adjuster setting forth his position with respect to the claim. This information is under review."

Generally, Miller said, Fort Lauderdale-based Universal has "experienced substantially fewer re-opened Hurricane Irma claims than suggested by percentages reported elsewhere. The company's claims team has worked diligently to handle its claims thoroughly and promptly. Although the company is always willing to consider additional information that comes to light after a claim is initially adjusted, its efforts thus far have resulted in a much lower percentage of reopened claims than suggested by other reported experience."

In Palm Beach County, slightly more than half of more than 40,000 claims against all insurers have been closed with payment, records from the Office of Insurance Regulation show.

More than 15,000 claims in the county have been closed without payment, and more than 5,000 are still open. Among various reasons for denials, insurers have said they do not believe damage was caused by Irma, should be paid by a separate flood policy, or does not meet hurricane deductibles. That's the money the property owner has to cough up before insurance kicks in, and in Florida such deductibles can range from $500 to 10 percent of a home's value. Hurricane deductibles have been rising in recent years in an effort to blunt increases in annual premiums.

In Palm Beach Gardens, Zuniga said she is a condo unit owner who lost a tenant because roof damage has not been fixed. As she tells it, the knotty problem involves a Citizens policy held by a condo association that covers the roof over multiple units while other policies cover condo interiors, but Citizens assessed damages as falling short of a hefty deductible. An attempt to reach association officials was not successful, but Zuniga said the bottom line is she has been left with no tenant, a leaky roof and no resolution in sight.

"It makes me not sleep," Zuniga said.

Jim Cowan, another condo owner in the same Palm Beach Gardens community who said he worked as an insurance agent for many years, said he is facing similar problems. He believes claims adjusters working for insurers often face pressures after big storms to "just pencil-whip it and close."

But the books on 2017's biggest storm remain far from closed even as the next threats await, as Farach paints the picture: "Many South Floridians whose homes and other property were damaged are still waiting to get paid by insurers while the 2018 hurricane season looms on the horizon."

Hurricane Irma

--Value of Florida insurance claims: $8.6 billion excluding federal flood insurance

--Claims filed: 924,439 in Florida, 40,754 in Palm Beach County

--Closed with payment: 521,797 in state, 20,491 in county

--Closed without payment: 296,724 in state, 15,215 in county

--Open: 105,918 in state, 5,048 in county

Source: Florida Office of Insurance Regulation as of April 12, 2018

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