Prepare for Insurance shortfalls..

[Aquawind]

Most likely what you get back will be inadequate and you may not have a home for a year or 2...

Victims, Citizens at odds

Insurer not paying some because of law

By PAIGE ST. JOHN,
THE NEWS-PRESS TALLAHASSEE BUREAU
Published by news-press.com on April 21, 2005

TALLAHASSEE — Records show Citizens Property Insurance owes $68 million to 351 storm victims left homeless by wind and flood.

They are people such as Kathy McKenney, whose condemned Navarre home has not been rebuilt because the state-backed insurer claims Florida's valued policy law doesn't apply to her.

That law requires insurers to pay the policy limit when there's been a total loss. Despite a 2004 court ruling to the contrary, insurers contend the protection doesn't exist if an uncovered peril, such as storm surge from a hurricane, contributes to the loss.

"We don't insure for flood," State Farm lobbyist Mark DeLegal repeatedly has told lawmakers, as the industry presses the Legislature to write the exemption into law. Without it, insurers contend they will be forced to pay for shortfalls in federal flood insurance. State Farm has 264 of its own court-contested cases on the line.

McKenney is worried if Citizens wins in the Legislature, it will apply the victory retroactively to her and other 2004 hurricane victims.

Claim records show the state-backed insurer has paid only $20 million to those storm victims while it denies their right to full damage.

Policyholders have responded with at least 79 court cases against Citizens, State Farm and Allstate in Escambia County. Citizens has agreed to a class action suit in Leon County court, where a May 26 hearing is set.

Hurricane Ivan wiped out McKenney's home overnight. She waited five months for her first check from Citizens.

After receiving seven months of almost daily phone calls from McKenney, and two conflicting engineering studies, Citizens has agreed to pay $60,000 for structural damage to a house it insured for $180,000. Rebuilding the house will cost $260,000. Federal flood insurance has paid $38,000.

The clock is ticking on McKenney. She has five months left to rebuild before losing the $10,000 Citizens held back for "depreciation" of her ruined house, or the county's condemnation order requires her to bulldoze what is left.

The amount Citizens might have to pay McKenney and those like her has become the weapon for insurance lobbyists who warn it will lead to premium increases, statewide surcharges and even reduce insurance availability.

"If we're now being told we insure flood ... we have a capacity problem and we'll have to change our marketing plan in Florida as will every other insurance company in this state," DeLegal told the House Insurance Committee.

Original legislation in both House and Senate exempted the industry from paying policy limits on multiperil claims. That's now out of the House bill and is in jeopardy in the Senate. Insurers have ramped up damage forecasts.

Citizens' pending deficit could double, meaning a 10 percent charge added to insurance policies across the state, lobbyists told Senate insurance committee staff.

"If this decision stands, (it) could result in $480 million increase in losses. ... We will redefine what's covered in homeowners insurance in Florida," said Gerald Wester, lead lobbyist for the American Insurance Association.

Citizens general counsel Susanne Murphy disputed an estimate exists.

The company's records show a different picture:

As of April 8, Citizens had received total loss claims from 351 policyholders who sustained at least some flood damage.

The company figures it might owe as much as $88.4 million to replace those homes, if each and every one qualifies for policy limits. Of that, Citizens has paid $20.2 million.

Citizens officials said the outcome of the dispute will have no impact on a pending $516 million surcharge to cover its deficit. That charge is based on the company's 2004 shortfall. Citizens intends to account for losses from the contested hurricane claims

http://www.news-press.com/apps/pbcs.dll ... /WEATHER01

Paul

[alicia-w]

We have the max insurance for both hurricane damage and flood insurance from USAA. However, since real estate has skyrocketed here, it will not rebuild our home. While the appraised value of our home is $200K, the real estate value is closer to $600K (what similar homes in our neighborhood are going for). We talked to a builder this weekend and he said it would cost about that to build our house today.

There are thousands of folks in Florida who STILL do not have settlements from their insurance companies. There are STILL folks with "blue roofs" and not many building supplies to go around.