Insurers are ready – just in case

Aug 19, 2008

Bradenton Herald–August 19, 2008


Insurance companies are urging homeowners to report any damage from Tropical Storm Fay as soon as possible.

"We will have mobile response units across Florida," said Nick Halliwell, spokesman for Allstate in Florida. "These units are claims offices on wheels. They will be deployed to the hardest-hit areas so our customers can get immediate help on the spot. Customers are urged to report claims immediately."

If forced to relocate or evacuate, homeowners should also make sure they bring key insurance documents with them, Halliwell said.

Andy Gregory, co-owner and president of Des Champs & Gregory Inc. insurance, said things were relatively quiet Monday in terms of customer inquiries about the storm.

"I think the severity of the storm is really not scaring people," Gregory said. "I think it should always be taken seriously, because a storm can strengthen quickly."

Insurers are not writing any new policies until the storm diminishes, as is typical.

Policyholders should have been given ample notice if their policy was set to lapse or be canceled, said Ed Domansky, spokesman for the Florida Office of Insurance Regulation.

Under Florida law, an insurance company must give a homeowner 100 days’ notice – 180 days if a customer for five years – if his or her policy is going to be non-renewed, Domansky said. Companies also must send out renewal notices 45 days in advance of a policy lapsing, Domansky said.

"If that notice period expired and the person had not acted on it, they would pretty much be left to their own devices at this point," he said.

Sam Miller, executive vice president of the Florida Insurance Council, doubts that the storm will result in significant damages in the state.

"We hope it’s just going to be a tropical storm or Category 1," Miller said. "Barring any major tornadoes, the wind loss is usually fairly low for a Category 1 hurricane. I think there’s going to be a lot of rain and some flooding, but as long as it doesn’t intensify in the Florida straits into a (Category) 2 or 3, there should be limited wind damage."

While some have expressed skepticism about the adequacy of the Florida Hurricane Catastrophe Fund, which has about $12 billion to cover insurance claims, Miller said a storm like Fay in its present state would likely not even trigger the fund.

Insurance companies operating in the state must accumulate $6.5 billion in claims before the CAT fund, which serves as backup insurance for them, goes into effect, Miller said.

"We’re just not going to get that from this storm, unless it intensifies," Miller said. "The CAT fund is intended to be reserved for a really serous storm event."