Claims Estimates for Hurricane Ike Still ‘Fluid,’ Commissioner Says

As of late November, estimates of insured losses from Hurricane Ike, which hit Galveston on Sept. 13, were in the $6 billion to $8 billion range, according to Texas Insurance Commissioner Mike Geeslin. However, Geeslin said those estimates are “fluid,” noting that more a more accurate estimate won’t be known until about the 90-day mark, or mid-December.

“I want to caution anybody that reads this that it’s subject to change as we get more claims development,” Geesin told Insurance Journal.

Geeslin said the Texas Department of Insurance had fielded around 1,800 Ike-related complaints from insurance consumers by late November.

“To put that into perspective, the total for [Hurricane] Rita was right around 2,000, and it was several months post-Rita that that number reached 2,000. So here in a fairly early phase, within the first 90 days, we’re already approaching the levels that Rita was overall. I expect that we’ll continue to get complaints at a pretty steady clip for a while,” Geeslin said.

Still, he says insurance industry resources deployed post-Ike have been well beyond what he saw after Hurricane Rita in September 2005 and this year’s Hurricane Dolly, which hit the far South Texas coast.

“That’s not to say that we don’t have our issues, as evidenced by some of the complaints,” Geeslin said. “But there are a great number of resources being deployed to this state than what I’ve seen in the past.”

During a Texas State Disaster Coalition conference call in mid-November TDI noted that as of the end of September 530,000 Ike claims had been reported in 33 counties.

By Sept. 30 TDI had received 1,500 Hurricane Ike complaints, 649 of which had been closed and 851 were pending. Regulators said of the closed complaints, 162 were justified. Delays in claims handling, unsatisfactory settlement/offer, denial of claim, agent handling and customer service were some of the most common complaint issues. TDI had returned more than $1.8 million to consumers through the complaint process, according to TDI’s Valerie Brown.

Mark Hanna, spokesman for the Insurance Council of Texas, said at mid-November insurers had settled between 50 percent and 80 percent of Ike claims.

He noted that complaints against insurers, both justified and not justified, amounted to only about one half of one percent of the overall Ike claims so far.

“I don’t doubt that the number of complaints will rise when the more difficult claims are dealt with which is usually the case in any weather catastrophe,” Hanna said.

Hanna said the complaint ratio for Hurricane Rita was less than 1 percent and no complaints were reported from 2007’s Hurricane Humberto.