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Hurricane Ian victims suing their insurance company for underpaying damage claim

Florida Office of Insurance Regulation is investigating complaints of insurance companies not paying Hurricane Ian claims
McBride's Hurricane Ian claims
Posted at 5:40 AM, May 16, 2023

PORT CHARLOTTE, Fla. — Nearly eight months after Hurricane Ian ravaged Southwest Florida, some homeowners say their insurance company won’t pay for the full cost of repairs and they are left with no option but to sue.

This is the shell of our beautiful home… last year after the hurricane,” Sherry McBride said with a shaky voice as she stood next to her husband, Jim.

“We are in our 70s. He's a Vietnam veteran, and we’re hurting right now.”

Hurricane Ian ripped through the McBride’s neighborhood in Port Charlotte, leaving their three-bedroom retirement home uninhabitable.

The storm separated the back wall from the home, ripped up the roof in several places, and drenched everything inside.

“It blew in with such a powerful suction that everything got wet… anything that was in here was damaged. They had to totally gut it,” McBride showed ABC Action News.

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Nearly eight months later, the couple said they’ve only received enough money from their insurance company, American Integrity, to replace the roof and a temporary back wall.

Even after hiring a public adjuster for help with their claim, they said they’re still pleading with their insurance to help make their home livable.

“We went to these contractors and they gave us estimates — all in the same ballpark of what it's going to take to rebuild our house and when we had our mediation with our carrier, they wanted to pay pennies on the dollar,” McBride expressed. “We could never; we're not rich; we could never rebuild our house like it was before.”

McBride said most estimates are around $220,000, and the cost of supplies is only going up the longer they wait.

According to the McBride’s claims documents, the insurance adjuster estimated about $40,000 in damages.

With their $5,500 deductible, the couple and their public adjuster received a check for $35,000 in November.

The McBrides have also been paying rent to live elsewhere for the last seven months. According to their policy, their insurance covers “loss of use” up to $27,000, which would include having to pay rent, but the company marked the loss of use value at zero.

In contrast, the couple’s public adjuster’s estimate calculates replacement costs at $224,000, with at least $36,000 for loss of use.

We're defeated and it's just like, what are we going to do?” McBride said emotionally, “We're gonna have to take our claim to court because they leave us no choice.”

The Insurance Information Institute estimates insurance companies will pay $10-$20 billion to Ian-related litigation, in turn contributing to more financial burden and higher premiums for homeowners across the state.

“You can't settle it for literally 20 cents on the dollar… that’s not fair,” explained the McBride’s public adjuster Jerry Daniels with Corbitt Public Adjusting.

Daniels said their company currently has hundreds of Ian victims, with only less than 10% of claims closed. He said many clients came to them in December and January when the 90-day state requirement for insurance companies to pay claims ended, and people received checks far below what they needed.

The path that we have to take is completely contingent upon the decisions they make. If they were willing to come to the table and be reasonable, we could settle these,” Daniels explained.

We reached out to American Integrity asking about the McBride’s claim. A spokesperson said they can’t “comment on a claim with attorney and/or public adjuster representation.”

“I want my home back. I want to get up and make coffee in my own coffee pot, and I want to bring groceries back here and cook it and put on the table for my husband,” McBride expressed. “Things I always enjoyed doing. It's all taken away from me, and how much longer?”

McBride's Hurricane Ian claims

According to the state’s reporting data, the McBride’s claim is one of nearly 110,000 Ian claims still open as of March.  

We reached out to the Florida Office of Insurance Regulation (OIR) to ask about the concerns of insurance companies underpaying policies.

A spokesperson for OIR said they are aware of “accusations claiming insurance companies are not fulfilling their obligations to pay out claims.” They confirm they are investigating company claims-handling for Hurricane Ian and are “committed to protecting Floridians in this recovery process.”

We also followed up with the American Policyholder Association (APA). In December, APA Executive Director Doug Quinn said they were already fielding complaints regarding insurance companies. Now he confirms they are specifically recording complaints from those working within the industry.

"Since the APA focuses on criminal fraud perpetrated by the insurance industry against consumers, we’re not keeping stats on complaints from consumers related to insurer bad faith, but we have received quite a few," Quinn responded.

"The complaints we have been focusing on are related to insurance industry insiders who have come forward with complaints of potential fraud perpetrated to underpay Florida policyholders on their claims. To date, over 30 insurance insiders have reached out, although most wish to remain behind the scenes due to fear of retaliation by the insurance industry," he said.

One thing to keep in mind regarding any legal action as a result of Hurricane Ian is that new laws stopping fee multipliers do not apply.

Last year’s second legislative special session addressing Florida’s property insurance crisis took place two months after Hurricane Ian hit. This means that insurance companies still have to pay their policyholder's attorney fees if they’re taken to court and found liable for more damages; this can be up a rate up to $800 an hour.

Insurance companies that have gone insolvent or pulled out of the state in recent years have claimed financial burden from this type of "runaway litigation."

According to the Office Of Insurance Regulation, 79,220 lawsuits were filed against insurance companies in 2020, with underwriting losses of more than a billion dollars.

Going forward, carriers won’t have to pay these fees, but public adjusters say this is also worrisome because many homeowners won’t be able to afford help if their claims are denied or underpaid by insurance companies in instances like a hurricane.

American Integrity is one of the largest domestic property insurers in Florida. The company's CEO, Bob Ritchie, spoke to ABC Action News In-Depth Reporter Stassy Olmos about the property insurance crisis one year ago this month.

In an interview, he told Olmos that it had been a seven-year battle to sort through the roof storm damage claims coming in by more than two-dozen daily.

We have 250 employees; our largest department by staffing and payroll is our legal department,” Ritchie explained. “Of course, there are valid claims. We do our discovery, our adjudication, and some, in fact, are covered,” he said regarding roofing scams.

Here is the full statement from OIR regarding their actions post Hurricane Ian:

“OIR is aware of the accusations claiming insurance companies are not fulfilling their obligations to pay out claims to policyholders. Below is some additional information regarding OIR’s role in the claims-handling process, which may be helpful to your viewers.

OIR encourages consumers who having issues with a claim to report it. OIR works closely with the Dept. of Financial Services (DFS) Division of Consumer Services and Insurance Consumer Advocate to receive claims data and review consumer issues. OIR continues to review claims and complaint data from all stakeholders to evaluate insurers and remains committed to protecting Floridians in this recovery process. OIR is conducting investigations into company claims handling for Hurricane Ian. These investigations are confidential and exempt from public records until the investigation is completed or ceases to be active, per s. 624.319(3)(a)2., F.S.

Following Hurricane Ian, OIR issued numerous data calls to track market impacts and initiated more than 50 market conduction investigations to evaluate aspects of the claims handling process. Based on the findings of an examination or investigation, OIR’s market regulation units may take administrative action, impose administrative penalties, and require corrective action in order to protect insurance consumers from unlawful or harmful business practices.

It’s important to note, that while OIR is conducting investigations into company claims handling for Hurricane Ian, OIR’s market regulation units monitor and enforce insurer and insurance-related entity compliance with the Florida Insurance Code. When conducting an examination or investigation, OIR’s market regulation units take a comprehensive review of all business practices to identify issues such as form compliance, claims handling, insurer communication, proper claims investigation, interest paid on overdue claims, adequate monitoring of third-party administrators and managing general agents, and claims settlements. During these examinations or investigations, OIR’s market regulation units review all applicable information and documentation to identify and resolve alleged violations of Florida law.

I would also note, Governor DeSantis and the Florida Legislature have passed a number of consumer protections as part of the recent insurance reforms, including expediting the claims and communication process and providing OIR with explicit market conduct authority. As a result, OIR will not only be reviewing how insurers are responding to claims subject to previous prompt payment timeframes, but how they plan to update their processes to accommodate shortened timeframes.”

Click here to read about the Hurricane Ian insurance crisis specifically for homeowners with United Property & Casualty.

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