Hurricane Dennis’s Bark Worse Than Its Bite; Claims Expected to Grow

As Hurricane Dennis approached Key West, Fla., large insurance carriers, expecting and preparing for the worst, alerted hundreds of adjusters to proceed to Florida and Alabama, and put hundreds of other employees on standby, ready to go into action after the hurricane passed through.

Emergency teams and several thousand National Guard troops were deployed across northwest Florida and southern Alabama to remove trees and debris, restore power and provide emergency supplies.

Insurance industry sources told Insurance Journal Dennis was a fast-moving storm and caused less damage than they anticipated. Many insurers, who put several hundred adjusters on standby, reevaluated estimates on the number of claims they expect and called off about half those on standby, many of whom are on daily retainers.

A lot of claims are still expected to be filed in areas near where the eye of Dennis came ashore. In Destin, Fla., site of several recent insurance association conventions, virtually every unit in apartment buildings lining the beach had some damage. Houses near the beach were also destroyed or wrecked. Flooding was a major concern in Crystal Beach, Fla., where a massive storm surge hit the beach, leaving chest-deep water flowing through the streets.

“We are still in the process of finding out where the largest area of damage was taken,” Victor McCarley, executive director of the Alabama Independent Insurance Agents said. “At this point it appears to be an area between Atmore and Flomaton where the eye moved into Alabama.”

McCarley said he has not received reports of any significant numbers of claims from AIIA members.

“But those we have heard of are severe, including some total losses to businesses and homes, McCarley explained. “Damage estimates for Dennis are well below what Ivan did as this storm moved across the state much quicker than Ivan. All of our members are back on the job taking care of their clients.”

“Actually we have not sent anyone out on the road,” Jennifer Pitts, a spokeswoman for the Florida Independent Insurance Agents said. “We came in this morning and called all of our agents in the counties to the west of us and only a few had any damage, which were in Milton, Fla.

“Although they were working they had no power. We have one person that will be traveling to Milton Wednesday to check on those agencies, but otherwise we faired pretty well–now if Emily would just go somewhere else!”

The Professional Insurance Agents of Florida commented that Hurricane Dennis’s bark was worse than his bite.

“We made calls to our members in the affected areas and they seem to be faring well under trying circumstances–no electricity and spotty phone service–but that the level of claims is manageable,” a PIA of Florida spokesperson said. “We’ve overnighted SERT badges to members in need. Many members reported PIA’s Hurricane Prep CD provided them with timely information that they were able to put to good use to protect their agencies.

“Although Navarre Beach sustained major damage, preliminary reports indicate the damage to the Pensacola area is relatively minor, especially in comparison to Hurricane Ivan. Wakulla County, 175 miles to the east of where Dennis struck, did sustain damage due to a high storm surge.”

Julie Pulliam, a spokeswoman for the American Insurance Association in Atlanta said, “We’re primarily working behind the scenes to keep the lines of communication open between carriers, the Florida Department of Financial Services and the public.”

Pulliam said AIA is monitoring the industry response on the ground (via members, whose adjusters are moving into the Panhandle area) and staying in touch with DFS regarding any emergency rules, or informational memorandums that may be issued in the next few days affecting the claims handling and reporting phases.

“In terms of public information, we’re working through the Florida Insurance Council, which will issue a media release today that reminds the public that the single season hurricane deductible is now in effect, and also that some of the changes to the law passed in the 2005 session do not take effect until October 1 (e.g. the prohibition by carriers on holdbacks, so that the carrier can no longer wait until the policyholder actually replaces or repairs property to pay the full replacement cost).

“We’ve also been in touch with insurance departments in Alabama and Mississippi, but so far the number of claims is not at a level to require any special instructions or involvement by those departments,” Pulliam explained. “The same is true in Georgia, where early estimates are for $3 million in insured damages from Dennis.”

Safeco is the latest carrier to announce it has deployed members of its National Catastrophe Team to Alabama, Florida and Georgia. Safeco’s claims personnel are moving into impacted areas to assist customers, issuing emergency funds to policyholders and expediting claims.

Safeco claims professionals are available to take customer claims 24 hours a day, seven days a week. Customers who find damage to their vehicles, home or small-business property should call 1-800-332-3226 to file a claim.