RACELAND, Louisiana. Nearly six months after Hurricane Ida tore the roof off Brett Gabriel’s house, filling it with rainwater, recovery seems as impossible as it was on the day of the storm.
It would take more than $150,000 to make the house livable for Mr. Gabriel and his wife, according to the installer he hired, to make the house livable for Mr. Gabriel and his wife. But after his insurance company sent their assessor to inspect the damage, the company offered only $21,000 — enough to replace the roof — with another $6,000 left.
The insurance policy “should have been insurance,” said Mr. Gabriel, who slept in the house for months after the storm, even as he developed coughs and headaches, which he blamed on the black mold climbing the walls. Although the state gave them a travel trailer in January, they said it was barely big enough for them to sleep comfortably and they still spend their days in their damaged home.
At a small church within walking distance, where Mr. Gabriel is the pastor, nearly all congregants with homeowner’s insurance experienced the same thing, he said.
“We could finish each other’s story,” he said.
He tries to encourage patience, but his own is drying up.
“How do you rest? How do you get some kind of peace? Mr. Gabriel said, adding, “It’s like we’re stuck in purgatory.”
As hurricanes, floods and fires hit homes across the country with heightened intensity, homeowners are increasingly facing disaster after a natural disaster: fighting insurance companies lasting months or even years for recovery funds.
There is little hard data on whether the rise in extreme weather and natural disasters is prompting insurers to find more ways to say no.
But residents, lawmakers and lawyers say delays and underpayments are becoming more common as insurance companies often send inexperienced appraisers and company-appointed engineering firms whose damage estimates are well below the costs needed for repairs, especially when labor and supply costs are factored in. . grew up.
Mike Fesi, the Republican state senator representing the Louisiana district most affected by Ida, believes that about half of his insured voters experienced delays or underpayments.
“I don’t know if they are doing it on purpose,” said Mr Fesi, who himself has experienced delays in his insurance claim. “I wouldn’t like to think it is.”
But as insurance companies face near-record losses due to alternating hurricane seasons as well as natural disasters like wildfires in the West, some are seeing more than occasional problems.
“What we see there, I see across the country,” said Doug Quinn, executive director of the American Insurers Association, a watchdog organization that he says regularly receives complaints from both policyholders and industry workers.
The organization recently filed a criminal lawsuit against two Florida homeowners whose homes were damaged by Hurricane Irma in 2017, alleging denial and underpayment by United Property & Casualty Insurance Company. The insured association said the complaint may represent the experience of thousands of hurricane victims. The company, which said it had not yet received a complaint, declined to comment.
Insurance industry officials said companies have paid out huge amounts following natural disasters in recent years, with insurers expected to sue Louisiana residents hit by hurricanes in 2020 and 2021 for more than $20 billion in property loss claims. to be expected, said Mark Friedlander, public affairs officer for the Insurance Information Institute.
“When there is a catastrophic loss of this magnitude, you will have homeowners who are definitely unhappy with how their claims are being handled,” he said.
The vast majority of claims are dealt with promptly, Mr. Friedländer said, citing industry data showing that 83 percent of Hurricane Ida claims were “closed” by the end of the year.
But the data paints an incomplete picture, according to Jim Donelon, Louisiana’s insurance commissioner, whose office collected and released the data.
“It’s the company’s opinion, it’s not necessarily the policyholder’s opinion,” he said of the term “closed.”
In south Louisiana, delays have not only delayed the recovery process—many hurricane victims are still living in hotels or in trailers in backyards—but also forced some people to leave for good.
“That’s what they’re hoping for: you just put your hands up,” said Lynn Lewis, who has finally begun rebuilding her home in Laplace, a suburb of New Orleans, after receiving disappointing damage estimates from a number of different insurance agents. . “Many people have just left these houses. It will be a ghost town,” she said.
Kerry Andersen of Lake Charles said she was offered a fraction of what she needed to recover from Hurricane Laura in 2020 after nearly a dozen repairers and engineers hired by her insurance company checked the damage. In January, she finally decided to sell her house at a big loss.
“It’s a loss on another level because you’re also losing your community,” said Ms. Andersen, who has been tossing between rented apartments in Baton Rouge and New Orleans since the storm.
Mr Friedländer said most of the problems stemmed from smaller regional insurers, who he said “do not have the same capacity as a major national or super-regional insurer to deal effectively with a disaster like Ida.” Three smaller regional carriers have become insolvent in recent months, having entered state administration.
But lawyers say they hear about the same problems from policyholders large and small. Hurricane Ida victims have filed more than 450 complaints with the Louisiana Department of Insurance against State Farm, the state’s largest insurance company.
Roselle Gadson, a spokesman for State Farm, said most claims about recent storms in Louisiana have been resolved. “We are committed to treating every claim with care and concern, and to comply with the insurance coverage specified in the insurance policy,” he wrote in an email. For hurricanes in 2020 and 2021, “State Farm has paid out more than $2.5 billion in over 140,000 claims received from our Louisiana customers,” he added.
According to Mr. Donelon, complaints against insurers are likely only a small fraction of the number of people who have problems.
“Most people enter a situation believing that they will get an objective assessment and that they will get what they are entitled to – and this is the biggest misconception,” he said. Ted Patestos, an appraiser for Texas-based Smart Claims Public Adjusting, who was hired by Mr. Gabriel to assess damage to his home. “I haven’t seen a single insured yet who didn’t get more money.”
Most others who don’t know about government adjusters or don’t have the time or resources to fight their insurer simply accept their carrier’s offer.
“It’s kind of a war of attrition,” said Mr. Patestos, who said he left his job as an administrator at an adjustment firm hired by insurance companies after Hurricane Laura in August 2020 because he didn’t agree as he and his colleagues were asked. to process cases.
Supporters and experts say underpayments and payment delays, while not new, have become more common since Hurricanes Katrina, Ike and Rita wreaked havoc along the Gulf Coast in 2005 and 2008.
“They have become much more sophisticated, organized and standardized,” said Jeff Reisner, an attorney who has spent 30 years litigating insurance claims in Texas and Louisiana. “They have responded very creatively to the increased risk to the environment in order to minimize their own risk.”
Paul Newsom, managing director and senior analyst at investment bank Piper Sandler, said companies are struggling to cope with the cascading damage.
“I don’t think most insurance companies are really trying to cheat customers,” Mr. Newsom said. “But they don’t try to be generous.”
“The core business is so unprofitable,” he added, “that they simply cannot afford to be more generous than they have to.”
And, he says, some policyholders only realize after a disaster occurs that the policy they have bought is not enough. “Who reads the contract correctly? Nobody does that until their loss happens.”
At the same time, many clients find it difficult to afford adequate coverage as insurers, facing shrinking profits, have raised premiums and deductibles.
Homeowners’ experiences in the aftermath of Hurricanes Laura, Delta, and Zeta that hit southwest Louisiana in 2020 prompted lawmakers to propose a series of bills in 2021 to control the behavior of insurers.
But the insurance industry, heavily represented in the Legislative Assembly, opposed many of the proposals, and few of these bills were passed without change. The proposed $10,000 penalty for non-payment within 30 days of receipt of the field appraiser’s report was reduced to $2,500.
But now that the same fight is playing out in Louisiana’s more populous and politically powerful southeast, proponents of the law are hoping they can do better in the upcoming legislative session. At an insurance committee hearing in December, lawmakers from both parties expressed growing frustration and called for reform.
While Mr. Donelon, the state’s insurance commissioner, said Louisiana could be more aggressive in regulating the industry, he also said the state should be careful to avoid completely squeezing insurers out of the market.
“We are mandated — every state is mandated — to make insurance accessible and affordable,” said Mr. Donelon, a Republican. “And we can kill the goose that lays the golden eggs in a process of over-regulation.”
But others say fears of insurers being squeezed out are misplaced.
“What they’ve put people through is they shouldn’t have their own policies if they can’t get them treated in a timely manner,” said Dustin Granger, who ran unsuccessfully for the southwest Louisiana State Senate last year with insurance reform as one of the main issues of his election campaign. “If you can’t do business the right way, it’s not really insurance.”