Insurance companies are reportedly making significant progress in settling the record number of claims from Florida’s historic hurricane season which resulted in insured losses of more than $21 billion.
Insurers in Florida have closed more than 1.3 million claims, or nearly 86 percent of the record total of more than 1.5 million claims reported for the four storms, the last of which made landfall on Sept. 24, according to the Hurricane Insurance Information Center (HIIC) and the Florida Insurance Council (FIC). The claims data is from the Florida Office of Insurance Regulation as of Dec. 30, 2004.
By contrast, it took six months to settle 90 percent of the 700,000 claims from Hurricane Andrew, the previous record holder as the costliest hurricane on record, in 1992.
The OIR reported the following percentages of closed claims by storm and date of landfall: Hurricane Charley (Aug. 13), 89.9 percent; Hurricane Frances (Sept. 3), 84.7 percent; Hurricane Ivan (Sept. 13), 84.2 percent; Hurricane Jeanne (Sept. 24) 83.2 percent.
As they continue to settle claims, insurers are receiving about 8,000 new claims a week, even though the last of the storms struck Florida on Sept. 24.
Insured losses from the 2004 hurricanes in Florida are estimated at more than $21.6 billion by the OIR, surpassing the previous record of $15.5 billion set by Hurricane Andrew in 1992 ($20.3 billion in today’s dollars).
“Insurers are working as hard as they can to get checks into the hands of all their customers so they can rebuild their homes, businesses and communities,” said William Bailey, director of the HIIC, who noted the increased use of electronic claim filings and settlements.
In addition to the record number of claims covering some 30,000 square miles, Bailey cited several obstacles which insurers have worked to overcome:
· Evacuations. The initial process was slowed by the evacuations of 2.5 million Floridians, including claims adjusters, in advance of each successive storm.
· Contractor Shortage. Many people understandably are seeking repair estimates from contractors before accepting a claim settlement. Due to the severe shortage of contractors, claimants may wait weeks before getting an estimate, delaying the settlement and rebuilding process.
· Shortages of Building Materials. A sharp increase in demand for building materials in the wake of the four hurricanes, combined with record new home construction across the Unites States, has created spot shortages for items such as cement, bricks, roofing tiles and lumber.
· Contractor Requests for Proof of Payment. Many contractors are asking claimants to put up the windstorm insurance deductible amount (a percentage of the insured value of the home) before beginning work. Some claimants must take time to obtain financial assistance to cover the deductible amounts.
· The “Snowbird” Factor. A significant number of the 1.7 million claimants are “snowbirds,” Florida residents during the winter months who only recently have returned to their Florida homes and initiated the claims process.
Bailey pointed out that the use of technology not available at the time of Hurricane Andrew has helped insurers settle claims at a record pace. In addition, many customers are able to settle claims via fax and over the phone, precluding the need for adjusters to examine minor damage.
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