Hurricane Sally has exposed what I consider some very questionable underwriting tactics that recently have been written into some property insurance policies. A few examples are, limiting emergency service to a fixed cost or not to exceed a set amount which exposes the policyholder to higher out of pocket expenses. As an example, emergency services for mitigation efforts were not limited in Coverage A (your building limit of liability) in prior policy periods. Now we are seeing examples where only a small percent of Coverage A is being made available for emergency services.

The reason for this revolves around limited reforms of the assignment of benefits (AOB) problems covered ad nauseam in various forums all over the state. But the way these policies are now being written is nothing more than another deductible that hits the insured. As the legal abuse of assignment of benefits continues, the solution for the insurance industry is to increase rates and at the same time shift more of the loss costs back to the policyholders.  Nice huh?

Then there is another very clever way one insurance company came up with yet another deductible in the form of reducing additional living expenses. The way this scheme works is that in the event of a hurricane, this company will only pay 80% of your ALE cost. Clever, and they don’t even have to disclose this additional deductible as is required for a hurricane percentage deductible which has to be in bold print on the face of the insurance policy. Then, we hear anecdotally that one carrier in addition to the hurricane deductible is limiting coverage to $10,000 for the water peril in a hurricane exposure.

So, as you see, the insurance industry has been busy during the past ten years cutting coverages and in effect writing policy language which is nothing more than adding exclusions and additional deductibles on the backs of property owners. As you can see from some of these sly policy changes, you really have to look out for yourself. Otherwise big insurance will ensure that their profit is protected by increasing your out-of-pocket expenses.

How about making the insurance industry disclose (in bold print on the front of the policy) the fact that the policy has additional deductibles that will be your requirement to pay more as is required for the hurricane percentage deductible?  How about requiring the insurance industry to pay the full replacement cost of hurricane repairs to homeowners who actually purchased a replacement cost policy for the same period of time as the statute of limitation for filing property claims, which was reduced from 5 years to 3 years?  It seems unconscionable to me that homeowners have to pay big deductibles and then fund depreciation out-of-pocket at a time of economic and personal stress following a hurricane. Who in our legislature will have the courage to shepherd a bill like this?

Tutwiler & Associates has been working hurricane claims since 1984. For your own peace of mind, call our Pensacola insurance adjusters now at 850-783-3319 for a free, no-cost claim evaluation, visit our Hurricane Sally Insurance Claim Public Adjuster page for additional information or contact a public adjuster to submit a question to one of our insurance claim experts.