When a home suffers damage from a natural disaster like a hurricane, the insurance claims process can be difficult and confusing. In the aftermath of Hurricane Ian, adjusters are saying that insurance companies have been changing their work by lowering totals, rewriting descriptions of damage, and deleting accompanying photos without their approval, according to an investigation by The Washington Post. This has resulted in homeowners being left to pay for much of the repair costs themselves, due to the untenable gap between the cost of storm damage and what insurers are willing to pay to fix it.
After years of more frequent and intense storms, national carriers have pulled back from the market and smaller, regional carriers with smaller financial reserves have jumped in. As a result, companies have been aggressively seeking to limit payouts to policyholders by altering the work of licensed adjusters. The Post's investigation included interviews with dozens of policyholder advocates, attorneys, and Hurricane Ian survivors, as well as insurance adjusters who oversaw more than 100 claims for Heritage and Florida Peninsula Insurance Co.
The adjusters, attorneys, and policyholder advocates allege that the independent adjusting firms were internally lowering estimates under the direction of the insurance carriers who contracted them. Emails obtained by The Post detail how independent adjusting firms followed orders from carriers to write claims in specific ways that significantly reduced payouts.
The Post made multiple attempts to interview and seek comment from Heritage, Florida Peninsula, and Tristar, but Heritage did not reply to calls and emails, while representatives for Florida Peninsula said they would not be able to help with this matter. Tristar said that they could not comment on Heritage Policy, procedures, and/or estimating guidelines due to a confidentiality agreement. However, the company said that it has reasons for altering claims and that “estimates are revised/collaborated throughout the entire industry at the direction of the insurance carriers. They have the final say.”
Property damage claims are commonly made after a hurricane hits a state, especially in Florida. In 2022, Hurricane Ian caused destruction to the tune of $112.9 billion in damage, according to a Swiss Re report. But the storm also caused significant damage to people's homes, leading to thousands of claims. However, according to state data, around 34 percent of the 708,255 claims filed have either been rejected or are still unpaid. One couple, the Sebastians, received just $2,500 for their expenses despite having submitted hundreds of receipts. It wasn't until after they spoke with an insurance commissioner and the Florida Department of Financial Services that they received an additional $4,092. Terry Sebastian, who filed two complaints with the insurance commissioner before speaking to media, expressed his anger at his insurance company for "ruining people's lives." He claimed that he threatened to file for bankruptcy but was not taken seriously.
After the hurricane, insurance adjusters have been receiving increasingly frustrated calls from policyholders anxious about their final claim estimates or lack thereof. Unfortunately, many policyholders are still waiting for responses even after the 90-day deadline. In fact, Lee, an adjuster, said that his reports were being heavily revised by Heritage's claims managers, with entire sections removed, photos and line items deleted, and captions changed without any factual basis. This cutting down of a valid claim estimate is potentially fraudulent and could be considered as such if done intentionally by the insurance company to avoid paying out losses.