One of the strongest worded notices to insurance companies to pay promptly and do whatever it takes to help policyholders following a disaster came from Florida Insurance Commissioner David Altmaier in a December 19, 2018 memorandum entitled Hurricane Michael Claims Response.
All claims managers should reflect upon this paragraph in the directive:
To facilitate the payment of Hurricane Michael claims, it is important that insurers have sufficient claim adjustment and consumer service resources to provide policyholders with access to effective customer service. Insurers may need to augment available claim or customer service resources, establish mobile claims offices in the Florida Panhandle, initiate outbound calls to claimants, or take other action to provide quality policyholder service. The Office expects insurers not only to comply with the provisions of Florida law but also to do everything possible to respond to the needs of affected Floridians, restore a sense of normalcy, and facilitate restoration and recovery in impacted communities.
This is a strong message. I have criticized Commissioner Altmaier on closed claims statistics following Hurricane Michael, but he and his staff get an A+ for the message of this memorandum.
The requirement “to do everything possible to respond to the needs of affected Floridians” is the same language I often use. Insurers should have a sufficient number of competent and motivated adjusters with the authority and time to properly investigate the facts of a loss, evaluate the amount of damage and promptly pay whatever is found is owed under the policy. Those same adjusters should assist the insured by explaining all the benefits which are available under the policy and how they can be obtained as quickly as possible.
While the Florida legislature has wrongly given far too much leeway to the excess and surplus lines community selling insurance in Florida, the insurance commissioner still has authority over their claims handling. The excess and surplus lines industry uses a lot of independent insurance adjusters and third party administrators. These individuals and entities along with the home office claims managers they report to—even if in London working at a pub—are the worst offenders of Commissioner Altmaier’s directive. I noted this in Are Insurance Company Adjusters Really Working Around the Clock and Making Accurate Estimates?
Transparent market conduct studies and hearings should be immediately made by those overseeing surplus lines carriers. These studies and hearings will highlight the need to reign in these maverick players in the insurance marketplace and hold them accountable to the extent current law allows.
Thought For The Day
We have to do a better job of putting some rules on the insurance companies