Fla. Storm Victims Say Insurers Low-Ball Them

"So many Floridians are hurting and struggling to start over. My goal is to help them do that by getting their insurance claims resolved," said Florida's Chief Financial Officer Tom Gallagher, who oversees the Florida Department of Financial Services.

A similar program had also been implemented by Mr. Gallagher after Hurricane Andrew in 1992, when Mr. Gallagher was serving as the state's insurance commissioner.

The mediation program?created by the state's emergency rule?establishes a dispute resolution process for Floridians who seek assistance with resolving hurricane-related claims before turning to other legal options.

Under the emergency rule, once a policyholder disputes a claim settlement offer, the insurer is required to notify the policyholder about the right to mediation.

Justin Glover, spokesman for Florida's Financial Services Department, said We are hearing complaints about some insurers low-balling?where consumers feel they were not offered what the damage is worth."

Mr. Glover said his department plans to open at least four mediation centers. "They will be in areas that have been most affected by the four storms, starting with a location in Port Charlotte, which was hit by Hurricane Charley," Mr. Glover told National Underwriter.

At this stage, Mr. Glover explained, Floridians who were hit by Hurricane Charley are nearing the end of their process with insurers, "so this is the time they may need mediation the most."

Under this new program, mediation is available to anyone filing a residential property-damage claim of at least $500, not including the deductible. "We've contracted Collins Center for Public Policy, a non-profit group, to provide the service?they will provide court-trained mediators and they will be billing insurance companies $350 for each mediation," Mr. Glover said. "This program doesn't cost Florida consumers or taxpayers a dime."

He said one scenario where mediation might be helpful is when homeowners find a mixture of flood and wind damages.

"If you've got an adjuster looking at the flood damage for your flood insurance?which is through FEMA?and if you've got an adjuster with your insurance company dealing with your wind damage, there might be a dispute as to what damage was due to which peril," Mr. Glover said.

"If you have the roof blown off, and then if you have rain in your home, but if you also had flooding, there might be a dispute as to how much damage to the floor is due to rain and how much was due to flood," he explained.

Mr. Glover added that if the experience from Hurricane Andrew is any guide, thousands of Florida homeowners?perhaps upwards of 30,000?could be expected to apply to the program.

"Hurricane Andrew had about 600,000 claims and there were about 10,000 Floridians who applied for mediation," he said. "Now with these four storms, we've got in the neighborhood of 2 million claims?about three times greater than the number of claims from Andrew. So we could see as many as 30,000 Floridians asking for mediation."