Democrats on the Home Oversight Committee are calling on 5 southern states to elucidate how they’re retaining constituents from being ripped off by insurance coverage corporations.
As communities throughout the Southeast start repairing the harm from Hurricanes Helene and Milton, “we must ensure that they are not further victimized by insurance companies refusing to fairly pay out claims,” Rating Member Jamie Raskin (D-Md.) wrote, in a letter co-signed by Democratic Florida Reps. Jared Moskowitz and Maxwell Frost.
The letters to the governments of Tennessee, North and South Carolina, Georgia and Florida come because the onslaught of the 2 hurricanes this fall uncovered gaping holes within the nation’s flood insurance coverage protection.
These gaps, in addition to the growing withdrawal of insurance coverage corporations from areas vulnerable to pure catastrophe, signify a weak level within the methods of municipal finance that function the lifeblood for cities and cities throughout the U.S., and threaten to drive them into financial demise spirals if house insurance coverage fails.
On a smaller scale, dropping insurance coverage protection earlier than a storm — or having claims denied after — can wipe out the life financial savings of house owners, leaving them with a totalled home they’ll neither promote nor afford to restore.
To date, insurers within the state of Florida alone have already denied 37,000 claims within the aftermath of Milton and Helene — or 10 p.c of the overall quantity which have been submitted, Newsweek reported
And September reporting by CBS Information uncovered widespread allegations by former insurance coverage trade claims adjusters that the businesses they labored for had beforehand altered their stories to keep away from paying out claims to Florida householders.
Separate reporting by The Washington Submit discovered that Florida householders obtained payouts “45 to 97 percent” decrease than the damages estimated by area adjusters after Ian.
In a way, the Home Oversight lawmakers acknowledged of their letters, such points within the insurance coverage trade are nothing new. “There is a decades-long pattern of bad actors in the insurance industry—both large and small insurers—shortchanging customers in the wake of natural disasters,” the members wrote to the governments of the 5 states.
However they emphasised that danger of nonpayment of protection customers paid for was significantly pressing as local weather change drives up the variety of billion greenback disasters, “and as hurricanes reach further inland and higher elevations.”
Specifically, they flagged three potential strategies by which insurance coverage consumers may very well be defrauded — and referred to as on the states to particularly gather paperwork on them.
First, the lawmakers wrote, there are instances during which an insurance coverage firm revises the harm quantities logged by a area adjuster by greater than 90 p.c — the kind of distortion reported on by the Submit and CBS.
Then, they continued, there are instances during which claims are minimize by greater than 10 p.c on the premise that they are flood harm — a type of insurance coverage that few People have, and just about none of those that took vital harm throughout Helene — moderately than wind harm, which is usually coated.
Lastly, the members referred to as on state regulators to audit the steerage that insurance coverage corporations have been giving to staff and contractors about the best way to course of — and when to disclaim — claims.
In distinction with the actions referred to as for within the letter, Florida has sought to sort out the rising prices — and widespread de-insurance — in its insurance coverage sector by concentrating on not insurers’ practices, however these of householders who take authorized motion in opposition to them.
The state’s Republican-dominated legislature has pointed to post-storm lawsuits by householders — moderately than ever-more-expensive houses in the way in which of worsening storms — as the prime trigger of the state’s rising costs.
In 2023, the state legislature handed a sweeping invoice making it tougher for householders to sue their insurance coverage corporations
Many Republicans are extra broadly skeptical of the concept local weather change performs any position in rising insurance coverage costs. In a June Senate listening to, Sens. Ron Johnson (R-Wis.) and Chuck Grassley (R-Iowa) blamed the rising costs on stimulus spending, together with local weather laws, per the Georgia Recorder.
