This story was originally published by The Louisiana Illuminator.
Louisianans are fed up with insurance companies, speaking of their frustrations caused by slow-moving processes, struggles to contact providers and too-small insurance payouts after two years of severe storms.
Hurricane Ida landed in August, devastating large swathes of southeastern Louisiana. Months after the hurricane, people are still living in FEMA trailers or other temporary housing, waiting for insurance payouts to come. The Louisiana Legislature’s joint insurance committee held a hearing on the frustrating response Wednesday.
“It’s Louisiana in September. It’s 90-something degrees and you can’t live in your car. You look down the block and here’s somebody living in a mold infested garage, you try to talk him into moving into his car. It’s a dangerous scenario. We’ve got to see more education. We need to see carriers be a little bit more willing to fund their people,” said Doug Quinn of the American Policyholder Association, a nonprofit organization that looks out for policyholders, at the hearing.
Under current law, insurance companies need to send adjusters out within a month and can be given an additional 30 days during disasters to come back with a claim.
But insurance companies like State Farm and Allstate have come under fire for large turnover rates–switching adjusters on homeowners several times and forcing them to restart the claim process multiple times– as well as for sending inexperienced adjusters who were not able to accurately handle the process of evaluating disaster-damaged homes and businesses.
In Lake Charles, the situation is particularly dire. While Hurricane Ida didn’t hit the area, the city has been struggling to recover after being damaged by two hurricanes in 2020, flooding, winter storms and a tornado.
One homeowner in Lake Charles said she lost everything because of her insurance company. Tara Hillman said Hurricane Laura damaged her house when it landed as a Category 4 storm in August 2020. She filed a claim after the hurricane, but her insurance adjuster was inexperienced and her insurance payout was inadequate, she said.
“There are foundation, framing issues. He didn’t go underneath the house. He didn’t go in the attic. And he specifically told me he is not qualified to make these kinds of determinations for structural issues. But yet he wrote an estimate,” Hillman said.
She said she received a check to fix part of her roof, but she couldn’t fix the roof without money to fix the house’s foundation. When Hurricane Delta hit Lake Charles two months after Laura, causing massive flooding, it wrecked her house further.
Hillman filed a second claim, but said her second adjuster was no better. She’s still living in a FEMA trailer more than a year later.
"My house is collapsing,” Hillman said. “They gave me nothing. I have nothing.”
The scarcity of adjusters after Louisiana hurricanes is a problem, Allstate spokesperson Noel Young said, but it isn’t possible to keep the amount of adjusters needed in the aftermath of disaster on hand.
“Obviously, having licensed experienced adjusters coming in at the beginning helps. You’re reaching a point, though, hundreds of thousands of claims all at once, and that’s just in this state,” Young said.
“There are other catastrophes going on around the country at the same time. California’s having wildfires, you’re having floods in other places. So this isn’t the one place where catastrophes are all happening at the same time. So it’s a difficult thing for companies to handle,” he said.
Allstate and State Farm are the two biggest insurance companies in the state, holding about 36% of the market between them. After Hurricane Ida, thousands of claims were filed to State Farm, Allstate and other insurance companies.
Out of approximately 53,000 State Farm Hurricane Ida insurance claims, 82% have been closed. Around 1,300 insurance adjusters were available to help customers in the aftermath of Hurricane Ida, Natalie Brunson-Wheeler, a State Farm spokesperson, said.
Farm Bureau, a locally-based insurance company, had 9,170 claims after Hurricane Ida, with around 99% of these claims closed. Around 82% out of the 42,000 Louisiana Allstate insurance claims from Hurricane Ida have been closed.
But people like Hillman say that these claims don’t mean anything. A closed claim doesn’t mean the homeowner has agreed to settle, or is satisfied with the insurance company’s efforts.
“They did close,” she said of her own two filed claims. “But they’re not closed.”
Elected officials sympathized with the struggle of residents across the state, but offered no concrete solutions.
Louisiana Insurance Commissioner Jim Donelonhas repeatedly considered fining insurance companies. He stressed the importance of having legislation that protects policyholders but offered no specifics on what should be proposed.
“I don’t have answers for these very complex and very wide number of concerns that we’ve discussed here today that I’m very much aware of, and very much involved with,” Donelon said.
One lawmaker said she hoped residents could be given more ways to deal with insurance companies, so they would have more power during negotiations.
“I just wish there was some way we could let the public know what their rights are…these companies, to me, are bad actors,” Rep. Kathy Edmonston, R-Gonzales, said.