Joint Statement from American Insurance Association, Property Casualty Insurers of America, National Association of Mutual Insurance Companies, Florida Insurance Council
TALLAHASSEE, FL--The Florida Insurance Council (FIC), joined by the three national property and casualty trade associations, find that the report released today by the Academy of Florida Trial Attorneys, entitled “Pattern of Greed” to be totally without merit.
“While the insurance industry is busy helping hurricane victims reconstruct their lives again, the trial bar appears to be hell-bent on deconstructing the insurance industry. It’s an apparent act of sour grapes after losing lawsuits in Mississippi that they had hoped would garner millions of dollars for themselves,” said Sam Miller, Executive Vice President of the Florida Insurance Council.
The property-casualty insurance industry has great empathy for all victims of Hurricane Katrina – and Hurricanes Rita and Wilma. We are proud to be a central part of the recovery and rebuilding system along the Gulf Coast.
“The number one priority of insurers, especially after catastrophic events like Katrina, is to take care of our policyholders and help them rebuild their lives,” said Miller. “For the trial bar to cobble together a collection of media stories, full of unfounded and unproven allegations, to use in an attack on the tens of thousands of dedicated insurance industry employees who have been serving policyholders in the wake of Hurricane Katrina, is inappropriate and counterproductive. Insurers want to work with consumers and public policymakers in Florida to develop innovative solutions based on sound economic principles to stabilize the state’s insurance market and support the Florida economy.”
Like insurers, the trial bar has also been busy since Hurricane Katrina hit, but not in the service of consumers. Instead, they’ve engaged in a broad effort to distort the facts and paint an inaccurate and harshly negative picture of insurers. The facts are as follows:
FACT: As reported today by the Insurance Information Institute, nearly 95 percent of homeowners’ insurance claims have been settled in Louisiana and Mississippi, totaling nearly $15.5 billion. Homeowners insurers ultimately will pay more than one million homeowners claims totaling $16.4 billion from Hurricane Katrina.
FACT: Unfortunately, a very small percentage of claims remain unresolved. Some of these remaining claims will be resolved by the state’s impartial mediation program. Others will be resolved via litigation.
FACT: Insurers will not be satisfied until every single claim is settled; insurers are committed to paying for all damage that falls within the limits of the insurance contracts with their customers.
FACT: Insurers cannot pay claims for coverage the policyholder did not purchase – this would include damage from storm surge and flooding, both of which typically and historically have been clearly excluded from homeowners insurance policies.
FACT: In the Leonard v. Nationwide decision announced last week in Mississippi, the Court reaffirmed the long-standing flood exclusion found in most state-approved homeowners’ policies.
FACT: Reasonable people – and even some experts – may disagree over the facts in some cases where wind and water both impact a property in close proximity. However, the facts always must prevail, and contracts must be honored.
FACT: While it may appear to be an attractive solution to make up losses in one state or in one line of insurance by charging other insurance customers more, in reality it simply does not work. We in Florida do not pay a higher premium to account for earthquake-prone homes in California or tornado-prone homes in Kansas. Homeowners in those states likewise don’t pay for hurricane-prone Florida.
Similarly, it would not be fair to charge someone who lives in Iowa or a Florida resident who only has auto insurance with a given company to make up losses experienced by a Florida homeowner who is insured with a company that just writes homeowner policies.
Each state has its own set of potential perils. That’s why insurance regulators in every state force private insurance companies to establish rates specifically suited for each given state. As such, Florida has to stand on its own, just as earthquake-riddled California and tornado-shaken Kansas does.
Going forward, we urge the plaintiff’s bar to join with insurers in a productive and positive effort to meet the enormous challenges of rebuilding the Gulf Coast. The Hurricane Katrina recovery is almost one year old – insurers remain dedicated to a successful completion of that effort; can the trial bar say the same?
For further information, contact
Executive Vice President
Florida Insurance Council
(850) 386-6668 ext. 223