September 13, 2004
By Brian Johnson
WINK News has uncovered more potential insurance
problems for florida's hurricane victims.
Long before Charley charged into Florida, Hurricane Isabel
flooded out the futures of thousands of people in North Carolina and
Fred Gentry is one of them: "My house was hit by a 20 foot wave.
It destroyed three structural walls. The insurance company said it
was cosmetic damage."
Maryland's former insurance commissioner, Steve Larsen, says
problems like Gentry's are common: "So many people have lost so much
and have been so misled and are really suffering."
Our investigation found, victims of hurricanes Charley and
Frances are starting to have the same problems.
"We had three feet of water on the main floor," Rachel Zammit
told WINK News.
She fought back when her insurance company offered $1,000 to fix
all the damage to her Fort Myers Beach home.
"The claims adjuster called me back and said that somebody
misread my policy.. and i'm entitled to $22,000," Zammit says.
But, flood insurance policies are the same nationwide. There's
nothing to "mis-read" from one policy to the next.
Steve Kanstoroom says, Isabel victims have been fighting this
fight for almost a year: "I got started when i found out they were
receiving pennies on the dollar for their claim and i thought
something was dreadfully wrong."
One insurance adjuster, who wanted his identity hidden, says it's
no accident: "my professional opinion is.. they're price
Dan Montgomery, who has been adjusting disaster claims since
before Hurricane Andrew, says one problem is people think insurance
adjusters are there to help: "It's exactly the opposite. The
information they give to the insurance adjuster is typically used by
the insurance adjuster to make a minimum claim settlement to get the
insurance company out of that contract as quickly and as cheaply as
With help from Kanstoroom, and the people he's worked with, we
pieced together how insurance customers often end up being offered
shockingly low settlements.
Insurance companies use databases to determine what the repairs
on your house will cost.
Our investigation found, adjusters often use databases of new
"New construction costs are way way less than remodeling
construction costs," Montgomery told WINK News.
Florida contractor Ron Hill says he can't help people fix their
homes after Charley for what insurance companies want to pay: "Just
based on the numbers they're using, the database is probably about
ten years old."
Even the company that publishes one of the databases used to
settle Isabel claims calls some of the methods used
And Isabel's victims say low-ball settlements are only part of
"They will pound you, and say, 'you either sign this proof of
loss.. or you will get nothing.' That is not true, don't fall for
that," Gentry told WINK News.
Here's why that happens.
Wink News has obtained video of an adjuster
briefing, held in Fort Myers, right after Charley hit.
On it, you can hear adjusters being told they'll do better if
they settle claims fast: "If you can close in 15 days.. that's an
even better score," a trainer says on the tape.
That may sound good for customers, too.
But most adjusters don't get paid until you settle.
So we found victims getting letters from an adjuster saying
things like "the prices I am allowed to use are regulated by the
The President, a US Senator, the Inspector General, and Baltimore
County have all called for investigations.
Despite all that, FEMA says it's doing fine.
In fact, David Maurstad, a high-ranking FEMA official, told us,
the flood insurance program is working like it's supposed to: "The
National Flood Insurance Program is intended to provide some
financial assistance to get people back on the road to recovery.
It's not designed to make them exactly as they were prior to the
But the Flood Insurance Reform Act of 2004, signed into law by
the President in June, says the exact opposite.
The law says, the program's goal is "that flood victims be
restored to their pre-flood conditions."
That conflict may explain why victims are having to fight so
We arranged for Steve Kanstoroom to show Governor Jeb Bush the
results of his investigation.
And we took those results to Florida's Chief Financial Officer,
Tom Gallagher. Gallagher told us, his office will take on any
adjuster who underpays a claim "we will investigate every single
case you give us."
Isabel victims have also filed a class action lawsuit against
FEMA, which oversees the National Flood Insurance Program.
So, if you have an insurance adjuster coming out, keep these
things in mind:
Don't agree to a settlement until you either get a contractor's
estimate, or you make sure what the insurance company is offering
will actually cover your repair costs.
And if you feel you're not getting a fair offer, call the State's
Insurance Hotline 800-22-STORM.
You eventually have to sign a "proof of loss" that identifies
what is damaged, but don't let anyone tell you, you have to accept a
dollar amount for your damages immediately.
There will ultimately be a deadline, but it's not anytime