Allan Bense

Hurricane Michael policyholders who are battling their insurance companies have a somewhat surprising ally in former Speaker of the Florida House Allan Bense who was quoted in a Miami Herald article, Insurance Companies ‘Terribly Unhelpful’ With Hurricane Recovery, Former Lawmaker Says.

Former Florida House Speaker Allan Bense is bashing insurance companies handling Hurricane Michael claims, saying they were the ‘No. 1 obstacle’ to recovery and accusing them of being ‘terribly unhelpful.’

‘I’m on my seventh adjuster for my home. Seventh adjuster!’ Bense, a Republican, said at a Thursday news conference advocating for more help in the Panhandle, nearly a year after the hurricane made landfall.

‘Insurance companies, just frankly, try to beat you down,’ he said. ‘They’re trying to wear me out. I’m not the type of guy to pick that fight with. But still, it’s a problem.’

Bense’s conclusion is the same finding and message that academics studying the situation say is happening. Rutgers Insurance Law Professor Jay Feinman wrote a book on the subject. He recently highlighted the motive and incentives of the insurance industry to underpay claims in a paper, The Protection Gap in Homeowners Insurance.

On the company side, failure to pay claims at less than full value may be due to bureaucracy, claims personnel’s lack of knowledge of the terms of policies, or worse. The ‘worse’ is the potential mismatch of incentives in an organization; customer service that aids reputation and retention are important, but so is the need to limit claim costs. If the claim process is perceived as a profit center, claims can be underpaid in ways large and small, incidental and institutional.

The attorneys at Merlin Law Group agree with Allan Bense and Professor Feinman. We see examples of what they have found all the time. These are the reasons we need very strong pro-consumer laws to protect policyholders. The entire purpose and mission of the claims department following a loss should be to get all the monies owed to their customers out of the insurance company treasury and into the hands of their policyholders as soon as possible.

The insurance industry should support enforcement and bad faith laws against its bad actor colleagues. There is simply no excuse for bad acting insurers to get a competitive edge by wearing down their own customers rather than fully paying all the policy benefits right away. We have to look at these wrongfully acting insurance companies that delay and underpay claims as thieves preying on the public and honorable insurers.

People reading recent news articles and even my posts may think that all insurance claims adjusters and managers act only for selfish pecuniary motives. This is not so for a great majority of people in the insurance industry. However, my point is that it is unfair to allow some to disregard the public interest without consequence.

Bad actors that refuse to adhere to ethical claims conduct should not get a competitive advantage over those that play by the rules. Failing to enforce complete legal accountability encourages more institutional wrongful behavior because rules and standards become meaningless if not enforced.

Without accountability for breaching obligations of good faith claims handling, claimants, the insurance industry, and the public are harmed. The law should not minimize these insurance claim obligations.

Thought For The Day

Sports teaches you character, it teaches you to play by the rules, it teaches you to know what it feels like to win and lose-it teaches you about life.
—Billie Jean King