Don’t Let Property Casualty Insurers Poor Financial Performance Undermine the Value of Your Insurance Claim; How to Fight to Get the Max

By Michael C. Perlmuter, JD, President & General Counsel

Gang, huddle up. This is one of those moments in time you need to be aware of a potential “penalty” before the matter and the opportunity to deal with it evaporate.

Strap on your chin strap and this QB is going to take you inside the insurer’s operations center and allow you a sneak peek at what they might be thinking and doing to minimize their responsibility to their business and individual policyholders. This is a timely, important insight to anyone with a commercial or home owner insurance claim in process or anyone with a potential future claim. Furthermore, the following should be kept top of mind down the road if and when insurance companies are generating underperforming financials.

Here’s the situation.

Have you been watching the news lately? Reading the papers? Other than political news, I mean. What stories have been grabbing the headlines? The weather, of course. Storms. Floods. Hail. North, South, East and West.

Consider what happens in the insurance world when the “weather is really crazy out there” which seems to have become the new normal.

The National Oceanic and Atmospheric Administration (NOAA) and The Weather Channel (TWC) both reported in early May that the 2017 tornado-related death rate is at the highest level in nine years.

And the adverse activity doesn’t seem to be letting up.  The recent tornadoes and/or severe flooding in our country’s heartland, including Illinois, Indiana, Missouri, Arkansas, Mississippi, Texas and Tennessee offer substantiation.

The effect of continuous catastrophic calamities – particularly the tornadoes, hail and severe flooding in the South, Southeast and Midwest since the beginning of the year – has taken its toll on the financials of the insurers in whom you trust.

Harsh weather and property damage affects insurance companies

The Wall Street Journal reported on May 1, 2017 that “Hail, tornadoes and an ice storm turned the first three months of 2017 into the most expensive quarter in more than 20 years for U.S. insurers.”

The harsh weather hit the pocketbooks of all major insurance companies.

Travelers reported first quarter 2017 catastrophe costs jumped 9% to $347 million from the same 2016 period.

Allstate announced 28 separate catastrophic weather events contributed to an estimated pre-tax Q1 loss of $781 million. One severe hail event accounted for more than 33% of the catastrophic losses for the quarter.

Catastrophic losses didn’t stop with these two behemoth carriers.

Liberty Mutual reported an 11% decrease in 2017 Q1 net income resulting from “elevated severe wind and hail storm losses . . . “

Zurich announced net income dropped 27.1% for the first quarter of 2017 against the same period of 2016 as one of its subsidiaries, Zurich Re, reported a loss due to “significant catastrophe losses . . . including more than $250 million in claims related to two hail storms that struck the Dallas/Fort Worth area in March.”

State Auto reported a first quarter 2017 net loss of $4.1 million — a significant decrease from the $3 million gain it had during the same period last year. State Auto cited catastrophe losses in Q1 2017 of $34.3 million as a principle reason for the loss.

Cincinnati Financial Corp announced it expected its first quarter 2017 results to include pretax losses of approximately $106 million. The company said 94% of that loss can be attributed to three separate storm events occurring between February 28 and March 22, primarily in states located in the Midwest and the South through its The Cincinnati Insurance Companies’ property casualty group.

Insurance company performance can affect policyholders’ damage claims

And the list of losses, like the beat, “goes on . . . “

Here’s the skinny.

So, what happens when the mayhem gets out of hand and black ink turns red? The insurers must change the flow back to black. Where does it come from and why does it matter to you, the insured?

If you are a shareholder of any of these property casualty insurers, you are probably less than thrilled by the news. But, as a policyholder, it is possible that you could be affected even more dramatically.

We all understand that insurance companies are for profit businesses run for the benefit of their shareholders (unless a mutual company and then run for the benefit of policyholders). In their competitive and regulated world, insurance companies are limited as to how they may raise rates across the board to try and recoup losses.

Understanding that, it can be expected that in an attempt to recoup some of the losses sustained during the first quarter of 2017 (which we already see extending into the second quarter with widespread flooding and tornadoes), insurance companies may take a longer look and tougher stance on claims presented to them during the balance of 2017 and even carrying forward into 2018, be it on issues of whether there is coverage for a loss, or perhaps more likely, on placing a valuation on a loss.

Reading between the lines, they may attempt to argue the validity of claim coverage and also under-estimate a loss. The mandatefor improvement and the methodology for doing so extends from the C-suite all the way down to the self-serving claim adjuster they dispatch to choke every dollar from what might be due to the insured.

Now forewarned, you need not let the insurer’s own business issues become your problem.  Forearmed, you can challenge their decisions and appraisals to obtain the amounts rightfully due you.

Alex N. Sill Company is a public claims adjuster who works for the insured and not the insurance company. Sill is expert at recognizing all of the tangibles which can impact maximizing the amount due under the provisions of a policy. During our nearly 90 years of experience as North America’s leading public adjuster and insurance claims consultant, we have successfully represented our clients’ best interests through each economic cycle, including skillfully maneuvering every insurance company twist and turn. Furthermore, we understand the many cycles of insurance company performance habits, especially when facing their own duress.

As such, we know not to let their problems complicate yours. They are chartered to be part of the solution, not a contributor to more problems.

Sill is the policy owner’s offense and defense. Our team of pubic adjusters is comprised of former insurance company employees and thus understands in all instances how to properly evaluate policies to

  • determine the right to coverage for a specific claim
  • render precise appraisals to combat the less than reasonable loss valuations generated by the carriers, and then
  • lead the fight to obtain 100% of what policy owners are entitled to under the policy terms.

Contact a Sill public adjuster near you for help maximizing your business or residential property damage insurance claim.

 

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