Citizens Property Considering Direct Reporting of Claims

May 18, 2005

New policies soon to be implemented by Citizens Property Insurance Corp., were presented last week to representatives from major insurance companies in Florida and Florida Association of Insurance Agents representatives meeting in Orlando. A plan for implementing a new system which would permit policyholders with Florida’s insurer of last resort to directly report claims if a catastrophe hits will soon be implemented.

A Citizens spokesman gave an hour-long presentation to major insurance company representatives and FAIA board members highlighting plans to implement improved, user-friendly claims-reporting software and for Citizen employees to cooperate more with agents.

“Citizens representatives said they want to be more helpful to agents in settling outstanding claims and meeting their responsibilities; especially since they have never been known for a great deal of cooperation,” explained Will W. Ghioto, chairman of FAIA’s 21-member Catastrophe Claims Advisory Council. “We emphasized that our members provide Citizens with a valuable service and they agreed.”

FAIA preparing to send letter

On June 1, Ghioto said FAIA will send a letter to members encouraging them to prepare for the hurricane season and suggesting that they notify policyholders make advance plans now.

He said a major thrust of the campaign will be to encourage agents to provide policyholders with a list of toll-free numbers they can call to file claims directly with the companies holding their insurance policies.

“During a catastrophe the average agent can’t handle the volume of claims,” Ghioto said. “If you drop 10,000 damage claims into the lap of an agency with five employees, they can’t begin to handle them all.”

Ghioto said a claims agent can handle 50 calls a day. He calculated an agency with five employees can tabulate 300 claims a day, or at least put them on paper. He said during last year’s hurricanes many agencies found out the hard way that this wan an impossible task.

“Direct reporting eliminates a lineup of people waiting at the front door. If they can’t reach you by phone on the first day, they come to the agency to visit you on the second day to report their claim and just slow everything down,” Ghioto said. “With direct reporting, the claims are reported directly by the insured to the company.”

According to Ghioto, FAIA has talked to large insurers and they all said they liked direct reporting because it works better than having the agent as the middle-man. They agreed that direct reporting eliminates the slower system of having the agent fax claims and provides more exact and essential information immediately.

FAIA posts insurance companies direct toll-free phone numbers on its website and this feature should become especially valuable during catastrophe’s. The letter from FAIA to its members will encourage them to print out this list and send it to their clients, and encourage them to call the company direct to file a claim.

“In the past having this information has been a great help,” Ghioto concluded. “Companies like it, we like it, it takes the pressure off the agent and is useful in many ways.

“The letter will emphasize to FAIA members that with the approach of the hurricane season it is time to get serious. They shouldn’t wait until a storm threatens, they need to send this information to their clients now,” he said. “At the same time agents need to formulate their own hurricane plan, buy a generator and get prepared for what could be an uncertain hurricane season.”

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