Dispute Mediation Program Begun for Hurricane Victims

Disgruntled Florida storm victims dissatisfied with their insurers can expedite settlements and keep the disputes out of court with mediation—at the insurance company’s expense. About two million Floridians are expected to file insurance claims for hurricane-related damage, and the state is preparing to dispatch mediators to resolve a record number of disputes between insurers and policyholders.

The mediation program is the brainstorm of Chief Financial Officer Tom Gallagher, who launched a similar program in 1992 after Hurricane Andrew. Its goal is to bring homeowners and insurers to the table with court-certified mediators overseen by the Collins Center for Public Policy. Private insurers, Citizens’ Property Insurance Corp. and the National Flood Insurance Program will participate in
mediation.

The state has contributed $200,000 to the Collins Center to jump-start the program, which will be reimbursed by insurers who will pay a $350 mediation fee for each case. Homeowners who cancel without a good cause will have to pick up the tab.

Under the program, insurance companies must notify policyholders of the mediation program when they lodge a dispute. Policyholders can request mediation using the department’s hurricane hot line: (800) 22-STORM.

Mediation will be available to anyone filing a residential property-damage claim of at least $500, not including the deductible. After a mediation request, the company has 21 days to resolve the issue before the mediation occurs.

Mediators expect to preside over as many as 30,000 residential cases; 10,000 mediation requests were received after Hurricane Andrew.

“Many storm victims feel they haven’t been treated fairly by their insurance companies,” Gallagher explained.

He expects the results of the mediation sessions to mirror results seen after Hurricane Andrew, in which 80 percent of the disputes were fully resolved, and 10 percent were partially resolved in the sessions. According to Gallagher, the remaining cases went to court, where it could take years before the cases are heard.

20 mediators already trained
The center has 20 mediators on the job and is now prepared to train another 30 employees to handle the ever-increasing caseload. In its announcement about the program, the center anticipated its mediators would face 2,000 to 6,000 claims.

Among the issues to be resolved by the center’s mediators are on-going disputes over the insured’s coverage amount, the amount required for alternative
living expenses and the reasonableness and necessity of construction and other expenses.

The first mediation center opened in Charlotte County. Other offices will open soon in Fort Pierce, south Orlando and Pensacola, so people can get their money as soon as possible and have their homes repaired.

11,000 cases logged
State insurance officials are working on 11,000 cases and have logged almost 60,000 telephone complaints.

Gallagher said many victims “face differences between what their insurance adjusters say and what the construction company says” work should cost.

Mediators negotiated 10,000 of the 600,000 insurance claims filed after Andrew struck Southeast Florida. Officials expect up to 300,000 claims, out of two million filed, could end up at the negotiating table.

“It cut right through the posturing and legal maneuvering,” said Bill Bailey,
director of the Hurricane Insurance Information Center, an industry-supported organization with offices in Punta Gorda and West Palm Beach. Bailey served similar duty after Andrew.

Complaint figures are being collected at the department’s hot line, which so far has been hearing complaints that company insurance adjusters are slow to arrive at victims’ homes.

Topics Catastrophe Natural Disasters Carriers Hurricane A.J. Gallagher