A year after Hurricane Michael, more than 18,000 victims who filed insurance claims are still waiting for their insurers to settle. What is even more unusual is that only 20 percent of those claims remain open because of litigation.

The question of why insurance companies have been dragging their heels on paying out claims recently came up before the Florida State Senate Banking and Insurance Committee – and constituents are demanding answers.

The Imperfect Storm

On Oct. 10, 2018, Hurricane Michael – at Category 5, the most powerful tropical storm to hit the U.S. in over a quarter-century – made landfall near Mexico Beach, approximately 100 miles southwest of the state capital of Tallahassee. Before it was over, over 70 people were dead and approximately $25 billion in property had been destroyed.

The storm also left an estimated $6.23 billion in insurance claims, on which many property owners are still waiting.

Why The Delays?

Florida’s Insurance Commissioner, David Altmeir, told the Committee that he didn’t know of insurance companies who had not paid claims on time and says there have been no violations on the part of insurance companies – but acknowledged that his office is “certainly hearing a high level of frustration” over unpaid claims.

That statement contradicts an earlier observation made by the Sunshine State’s chief financial officer and fire marshal, Jimmy Patronis. Last year, only a few weeks after Hurricane Michael, Patronis told a meeting of 40 insurance company representatives that there had been a “troubling” number of complaints and claims processing delays and denials.

Under Florida law, an insurer must pay a claim within 90 days. However, that particular clock only starts ticking after three things have happened:

• the claim is filed
• the insurer provides an estimated settlement
• the insured agrees to the amount

Those statutes give insurers many months to come up with that estimate.

Lobbying the Legislature

Last week’s state senate hearings were a prelude to the passage of more laws that favor insurance companies after lobbyists have complained about how litigation has increased the cost of settling claims. The industry has been seeking a number of laws to benefit insurers – and as it happens, the chair of the committee is an insurance agent himself.

However, a number of lawmakers in Tallahassee want to hear from the other side. One of the committee members, a successful contractor and home builder, said, “I think we hear one side of the story,,,we just become a front for the industry…it’s just kind of embarrassing.” He suggests that the legislature is clueless about the issues hurricane victims must contend with.

Help for Hurricane Michael Victims

If litigation has driven up the costs of processing claims, it would seem that insurance companies have only themselves to blame. In the wake of Irma, many victims complained that they were forced to fight with their insurers, and said their offered settlements were far less than the amount of their losses. This sort of behavior is why homeowners must often turn to litigation in order to get what they are owed after years of paying premiums.