Complaints Fly in Allison’s Aftermath

Judging from the number of complaints from insurers and consumers alike in the wake of Tropical Storm Allison’s June foray through Southeast Texas, it is doubtful that Allison will end up being the most popular name for a baby girl born in 2001. Then again, stranger things have happened – like the storm itself.

In early July, the Texas Department of Insurance announced it had received more than 150 consumer complaints against insurance companies in the aftermath of the storm, adding that compared with the tens of thousands of homes and businesses affected by Allison, the number of complaints received was fairly low. Many of the complaints filed with the agency involved alleged “low-balling” of claims by adjusters and non-responsiveness by some insurers.

Departmental staff began efforts to assist flood victims within days of the flooding. More than 70 TDI employee volunteers have served in the Houston area disaster zone, and some are expected to continue working there at least through mid-August.

Insurance companies have voiced their share of complaints, mostly concerning the numbers of dollars they’ve lost, or estimate they may lose, to catastrophe claims. The Chubb Corporation attributed most of its approximately $80 million in catastrophe losses for the second quarter of 2001 to Allison. Allstate Corporation estimated that $446 million of its $536 million in second quarter catastrophe losses was caused by Allison and several other spring storms. The National Flood Insurance Program, a unit of the Federal Emergency Management Agency, announced that claim payments to flood insurance policyholders in parts of Texas, Louisiana, and Pennsylvania soaked by the storm may go as high as $650 million. And Insurance Services Office Inc. estimated that U.S. property and casualty insurers will pay as much as $1.2 billion for Allison-related property damage.

Reinsurer Swiss Re said that the $1.2 billion figure may be too low and warned that insurers could be hit by further losses. Swiss Re indicated that ISO came up with its estimates early in the recovery period and asserted that the figure was likely to grow.

The National Climatic Data Center estimated that Allison caused $4.8 billion in losses so far in the Houston area and noted that damage in other states will probably bring the total up to more than $5 billion. Not all of those losses are covered by insurance. According to FEMA, state/federal grants and loans totaling more than $318 million have been approved for people who sustained damages to their homes and personal property in Texas.

Topics Texas Flood