A severe shortage of building contractors is partly to blame for the failure to close thousands of insurance claims one year after Hurricane Michael devastated parts of the Florida Panhandle, according to a representative of insurance agents.
Close to 18,000 claims remain outstanding following the Category 5 storm, which has led to clashes over who is to blame, with some pointing the finger at insurance companies for stalling and lowballing homeowners, and others alleging plaintiff lawyers are too ready to sue rather than settle.
Jeff Grady, president and chief executive of the Florida Association of Insurance Agents, believes the big difference between reconstruction in the wake of Hurricane Michael and other storms is the "relatively remote, rural location of the storm path and the severe shortage of contractors to perform the repairs."
"Without the ability to complete the work, the claim can not be settled within the normal time frame, despite carriers’ desire to do so to avoid the possibility of third-party litigated claims," Grady said. "The lack-of-contractors problem is only exacerbated by the real shortage in temporary housing in the area. This prevents many contractors from outside the area from being able to assist despite a huge demand for their services."
The hurricane, which made landfall near Mexico Beach on Oct. 10, 2018, caused estimated insured losses of $7.2 billion, the Florida Office of Insurance Regulation (FOIR) has previously reported. As of close to the end of September, 88.4 percent of approximately 150,000 claims had been closed.
More than 17,000 claims remain open, a figure that has prompted debate within the Florida legislature, and beyond.
"My top priority is getting Hurricane Michael claims closed," FOIR Commissioner David Altmaier vowed in a statement released following an Oct. 15 meeting of the Senate Banking and Insurance Committee. "We will review claims handling practices and identify unwarranted claim delays or denials, and take swift action against insurers violating the law."
At the committee meeting, former State Sen. Locke Burt, chairman and president of Security First Insurance, described Hurricane Michael's aftermath as a "gold rush” for attorneys.
“An attorney can get an unlimited amount of money for suing a property insurance company in Florida,” Burt said. "The plaintiffs’ bar is going to make between $300 million and $400 million suing insurance companies as a result."
Amy Boggs of the Florida Justice Association, which represents plaintiff attorneys, told the banking committee that attorneys "stand at the gate to help these people."
"Without us, who do they have? Really," Boggs told the committee. "You can stop attorneys' fees by not having your claims in litigation. Far from a gold rush. This is a crying shame, is really what it is. These are good people. These are hardworking people. These are not people standing in line for a handout. They’re trying to get their home rebuilt, their family business back.”