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Hurricane damage claims affect insurance industry

On Behalf of | Aug 24, 2018 | Hurricane Damage Claims

The damages caused by Hurricane Irma in Florida aren’t only having a serious impact on homeowners whose properties have been damaged; reinsurers also noted significant losses as a result of the numerous claims resulting from the severe storm. In earnings reports issued by Everest Re, net income fell 70 percent over income in the same quarter one year before. A net reserve charge of $250 million after taxes was a significant factor, and it came about because a number of claims related to the hurricane were reopened. Earlier reports that the claims were closed and finalized were incorrect, according to one executive.

At the end of 2017, the reinsurance company received loss reports from clients that showed closed claims. While there was an attempt to settle claims quickly, potentially to deal with scammers around the state who sought homeowners to assign them their insurance benefits in exchange for repairs to hurricane-damaged properties, many people who suffered damages did not accept these early settlement offers. Actual repair bills came in at higher than expected rates, highlighting the significant damage caused by the massive storm. In addition, insurance companies dealing with a surge in claims after Hurricane Harvey and Hurricane Irma had to raise the fees they paid to insurance adjusters to handle the claims.

This meant that many insurance companies saw rising costs outside the direct payments to clients for hurricane damage claims. However, the reinsurance company noted that despite the large-scale claims and declining income, the business continued to be profitable.

In order to keep profits up and expenses down, insurance companies may deny hurricane damage claims or propose low settlement offers that fail to cover the cost of necessary repairs. By working with an insurance law attorney, homeowners may work to protect their rights and secure the compensation they deserve.