NAII Urging Iowa to Refrain from More Involvement in Hail-Damage Claims

The National Association of Independent Insurers (NAII) is urging the Iowa Division of Insurance to refrain from issuing new directives on claims involving hail damage to buildings and diminished value of vehicles damaged in accidents.

NAII Counsel Ann Weber said in a letter to the division that any disputes on those two issues should be handled under existing state law regarding unfair claims practices.

“To issue additional restrictive requirements beyond that already required by state law (as the division is contemplating), and that is contracted for under the insurance policy, would be detrimental to Iowa insurers and consumers,” Weber said. “Such directives would only result in higher claims costs and higher premiums in an already tight insurance market.”

The division has indicated it is considering issuing a bulletin similar to one issued in Missouri requiring insurers to replace siding on all sides of any building that is damaged by hail.

“The handling of property damage claims by its very nature requires flexibility in the claims-handling process, on a case-by-case basis,” Weber remarked. “Iowa insurers have been processing hail damage claims on an individual case basis for years.

“Most certainly, there are losses where all four sides of a building should be replaced due to hail damage; likewise, there are certainly cases where the resulting damage from hail is minimal. Requiring insurers to replace all four sides on every building in each claim involving hail would result in an inordinate increase in the amount paid out by insurers (and, ultimately, raise the cost of premiums).”

In respect to claims for “diminished value” of damaged vehicles, Weber said the term is nebulous and “incredibly difficult, if not impossible, to quantify.”

“Insurers are required to pay claims as specified in the insurance policy, no more, no less,” she asserted. “Similar to our concern with hail damage claims, NAII notes that premiums today are not based on ‘diminished value’ as a viable figure to be recovered.”

Topics Carriers Claims Iowa