"Adjuster churning" leaves policyholders frustrated after major hurricanes
BATON ROUGE, La, (BRPROUD) - It has been three months since Hurricane Ida made landfall and some policyholders report they are struggling to get their settlements from insurance companies.
After Hurricane Laura and, now Ida, people were met with thousands of insurance adjusters from out of state that began a revolving door of conflicting reports and some losing out on much-needed funds. Insurance companies are required by law to contact their policyholders within 30 days of a claim, 60 if extended by the insurance commissioner.
"They hired warm bodies to comply with that 60-day requirement," said Insurance Commissioner Jim Donelon.
Donelon said he licensed over 15,000 out-of-state adjusters after Hurricane Laura. Legislators shared stories of people not getting accurate adjustments from their first meeting and would wait weeks for their next contact. Legislators were bothered by the idea that people not fully trained were sent to assess people’s homes to determine their payout after these disasters.
Lawmakers suggested legislation to limit the number of adjusters on one claim, but insurance companies say with the shortage of workers that could be a challenge. State Rep. Gabe Firment, a Pollock Republican, is an insurance adjuster. He said it is easy for some to get licensed and many of the qualified ones will follow where the pay is the best in other states, leaving a shortage in other areas.
"Clearly weed out those warm bodies and make accountable those insurers to have professionals go out and do adjustments so our policyholders in this state won't have to suffer," said State Sen. Joseph Bouie (D) New Orleans.
The Insurance Commissioner admitted the long line of adjusters could be a way to frustrate a policyholder to get them to give up on claims.
There was talk of making timelines for how soon a settlement must be made as people are waiting in severely damaged homes hoping for a payout.
"They cut off the timeline from FEMA for people to apply, a lot of people don't know whether they need to apply or not because they don't know how much they're going to get paid from the insurance company," said State Sen. Michael Fesi, (R) Houma.
State Sen. Gary Smith from Norco also shared his concerns from constituents who have gotten conflicting information from the churning of adjusters and what is covered and what isn’t.
"When an individual is sitting there, and many times not even in their home, and they haven't heard back from an insurance company I mean 60 days is a long time," State Sen. Smith said.
Allstate and StateFarm claimed they have closed about 80% of their claims from Ida. A closed claim does not mean the case is closed or has been paid. A policyholder can request an appeal or make further claims.
Insurance reform is expected to take a spotlight in the legislature next year after two busy hurricane seasons revealed shortfalls in insurance coverage and expediency.