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Disputed Isabel claims reviewed
Flood program to check, correct 80 complaints, Md. insurance chief says
Originally published March 16, 2004
Maryland's insurance commissioner said yesterday that he passed on dozens of complaints from Tropical Storm Isabel victims to the head of the National Flood Insurance Program, and both men said the agency will review those files and correct any flawed settlements.
Alfred W. Redmer Jr., the insurance commissioner, said he will also arrange for several storm victims who have had problems with the federal flood program to meet with the officials who run it. Redmer said he is confident that the program's director, Anthony S. Lowe, is sincere in his desire to help the Isabel victims.
"I think we're going to get some action," Redmer said. "I'm just sorry I didn't call him a month earlier."
Lowe said he has directed his staff to review the 80 files Redmer handed over Friday to determine whether the agents, adjusters or others involved in settling the claims made errors. If so, he said, the settlements will be corrected.
"This is a real activity we're undertaking," Lowe said. "This isn't a thought exercise."
James Shortley, NFIP director of claims, said he has begun reviewing Redmer's files. He said he has found some complaints about damages that are not covered by the standard flood insurance policy, but also others about adjusters failing to recommend payment for items that should have been covered or underestimating the cost to repair homes.
Lowe acknowledged yesterday that the National Flood Insurance Program, which is a part of the Federal Emergency Management Agency, needs to do a better job of tracking complaints. Out of more than 24,000 Isabel claims, the agency received 14 complaints in Maryland and fewer than that in the other states affected by the storm.
Flood insurance is a federal program, but most policies are sold and most claims are adjusted by private industry. As a result, Lowe said, complaints about flood policies don't go to one place. The agency needs a new "performance metric" to make sure complaints don't go unanswered, he said.
Lowe's comments come days before the six-month anniversary of the storm, which caused the worst flooding in memory in some parts of Maryland. Hundreds of residents have yet to return to their homes. The flood progam has received more than $300 million in claims for Isabel-related damage in six states and the District of Columbia.
In December, Baltimore County Executive James T. Smith Jr. hired Redmer's predecessor, Steven B. Larsen, to conduct a study of post-Isabel insurance issues and to recommend legislation to help victims and prevent problems in future storms. At the time, he sharply criticized Redmer for not doing enough to help.
Last month, Larsen released his report detailing widespread ignorance of flood policy details by consumers, insurance agents and adjusters, and a lack of coordination between federal, state and local officials. He also said many of those he surveyed reported that settlement offers were short of the money needed to rebuild, often by tens of thousands of dollars.
This month, Redmer met with members of Maryland's congressional delegation and with Lowe. Redmer presented his own report, which came to similar conclusions. He also said that his agency was conducting a number of investigations related to flood insurance.
Smith said yesterday that he is encouraged by Lowe's action but worries that the agency is not equipped to handle the volume of complaints Isabel generated. The county executive referred to a report in The Sun on Friday about the questionable use of pricing guides by insurance adjusters after the storm and said the volume of complaints about settlements is likely to increase.
Smith has argued that Redmer should be take a more active role in regulating flood insurance under state law. He said passage of a bill that Sen. Norman K. Stone, a Dundalk Democrat, introduced to require more direct action by the Maryland Insurance Administration is crucial.
"I'm very anxious for the General Assembly to support an opportunity to begin resolution of these claims now," he said. "Not planning for the next disaster but taking care of things now."
Lowe said he is considering flood program changes in three areas: ensuring consumers know what is covered; formalizing the claims appeals process; and bolstering education for agents and adjusters.
"A significant amount of our time up to now has been spent processing those 24,000 claims," Lowe said. 'Now it's an opportunity for us to look a little bit back in the rear-view mirror and see what the issues are that we need to address."
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