APCIA Defends Property Casualty Industry's Hurricane Claims Response

The American Property Casualty Insurance Association (APCIA) responded to concerns raised during a Senate subcommittee hearing about the handling of claims after Hurricanes Milton and Helene. According to APCIA, over $8 billion in claims have been settled to date, with approximately 80% of Milton claims and 84% of Helene claims resolved as of early February. Complaints accounted for less than 1% of total claims, indicating a generally efficient claims process in most cases.

The Senate Disaster Management Subcommittee had specifically scrutinized State Farm and Allstate for delays and alleged improper adjustments during the claims process. Testimony from policyholders and insurance adjusters highlighted frustrations with prolonged claim resolution times and instructions to alter storm damage reports. APCIA, while not testifying in person, submitted detailed correspondence providing data to clarify the industry's position on these issues.

Flood damage was a significant contributor to losses, especially from Hurricane Helene. However, less than 1% of homeowners in the hardest-hit areas carried flood insurance, which complicated claim outcomes. APCIA emphasized that many claim disputes stem from underinsurance or lack of coverage in federal programs like the National Flood Insurance Program (NFIP).

APCIA also addressed claims denial statistics, noting they are often inflated due to the procedural requirements for disaster aid through FEMA. Homeowners must first seek payment from their primary insurance before applying for FEMA assistance, which creates an official denial record that may be misleading.

Regarding the role of adjusters, APCIA confirmed that the use of both company-employed and independent adjusters to evaluate property damage and prepare estimates is standard industry practice. Estimates undergo review by inside adjusters to ensure accuracy and compliance with policy terms. APCIA did not specifically comment on allegations about directed adjustments but stressed that proper procedures are followed.

Overall, APCIA advocated for the continued authorization of the NFIP to provide long-term support and urged greater transparency and collaboration among insurers, regulators, and federal agencies to improve disaster claims management. The association also highlighted challenges related to flood insurance coverage gaps and the complexities of coordinating federal disaster relief with private insurer payouts.

This discourse underscores ongoing regulatory scrutiny and industry efforts to balance efficient claims processing with compliance and policyholder protection in catastrophic loss contexts.