The nightmare may soon be over for the hundreds of homeowners still unable to repair damages stemming from Hurricane Wilma, which swept through southern Florida nearly three years ago. Following the hurricanes in 2004 and 2005, three Poe Financial companies — Atlantic Preferred, Florida Preferred, and Southern Family — went out of business. In 2006, state regulators stepped in and the Florida Insurance Guaranty Association (FIGA), a nonprofit agency formed by legislature, has since been paying claims for the defunct companies.

“This has been an unusual insolvency,” said Michelle Lovern, deputy director at FIGA. “It has been the largest that the state of Florida has ever handled, and, at this point, we have paid 45,000 claims under the guaranty association. That doesn't even cover all of the claims that Poe had from the 2004 and 2005 storms.”

As of June, FIGA reported that it had settled about 45,000 claims — totaling more than $1 billion — and had another 2,700 files pending. A June 2, 2008 deadline was established by which homeowners once covered by the Poe companies could either settle a claim or file a lawsuit. To deal with the mound of open claims, the agency has augmented its core staff of adjusters and managers, adding four adjusters to the mediation process and conducting conferences with various public adjusters.

The defunct Poe companies are not alone in grappling with open claims, as most insurers report surge in reopened claims or new ones filed well after 2005, as a recent article in The Miami Herald stated. For instance, Citizens Property Insurance is dealing with about 509 claims in litigation and has been running with about 3,000 claims at any given time during the last 18 months. The problem seems less pronounced for Allstate, which says that it has noticed only a small number of open claims and cannot speculate as to how many of those are in litigation at this point. The insurer did comment as to running tally; it has paid $721 million for 103,000 Wilma-related claims. Meanwhile, State Farm seems baffled by the influx of more than 100 new claims each week.

The article cites one reason for the disputes and reopened claims as being many homeowners are displeased with settlements previously offered. Often, the actual cost of replacing or rebuilding property can exceed what was initially estimated, and homeowners can then file a supplemental claim to cover the overages.

In the future, settlements could come a bit quicker for Florida homeowners, as lawmakers have changed the state's insurance code. For instance, a bill passed in May will require insurers to pay the undisputed portion of a claim within 90 days.

For now, it is estimated that some homeowners may not receive their checks still for several months. In light of the recent suits filed on behalf of 300 homeowners in southern Florida against FIGA for alleged “slow response,” homeowners could wait even longer.

Sources: www.miamiherald.com, www.sun-sentinel.com

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