Insurance After A Disaster: Are You Sure You're In Good Hands?
Insurance companies always attempt to minimize costs, which is especially concerning for insureds in Joplin, Missouri following the May 22 tornado.

October 16, 2011 /24-7PressRelease/ -- Insurance companies already have paid out more than $500 million in claims for the May 22 tornado that struck Joplin, Missouri. However, the final total could grow to three or four times that amount.

The Missouri Department of Insurance said, on June 30, 2011, that insurance companies report receiving 14,910 claims on homeowners, commercial, and vehicle insurance policies so far. They have paid out $509 million on those claims.

John Huff, Director of the Missouri Department of Insurance, expects the payout for the tornado to total $1.5 billion to $2 billion, making it the largest insurance payout in Missouri history.

Problems Collecting After Disaster

While many business owners and homeowners attempt to put their lives back together after a devastating natural disaster like the Joplin tornado or a Hurricane, they may find themselves tangled in yet another disaster--dealing with their insurer.

Filing a claim with an insurance company can be more difficult than many people think. When a large-scale disaster strikes, most of the infrastructure in an area may be destroyed--everything from houses and power lines, to street signs and house numbers may be lost.

In Joplin, entire blocks were completely wiped out, not even seemingly permanent landmarks like large trees were spared. Insurance companies have shown they often are not equipped to deal with the sheer number of claims a disaster of this scale brings.

Businesses may also discover problems with their business interruption coverage, or realize too late they don't have any, or their coverage is inadequate or out of date. Homeowners may find their house was underinsured and their policy only covers part of the cost of rebuilding.

A Company Is Only As Good As Its Employees

Insurance companies always attempt to minimize costs. For a business like insurance, employment costs are a significant portion of their expenses. The companies do not want to pay for any more employees than they have to, so much of the staff providing customer service after a natural disaster may be short-term, contract or temporary.

While many of their employees are experienced and knowledgeable, some of the short-term employees are not. They may not fully understand their job and may perform poorly. They may force policyholders to resubmit information and documents. Also, documents may get lost because of the multiple transfers from one department of the company to another, and the policyholder may have to start over.

Bad Faith

Another way to cut costs is for the insurance company to delay or refuse to pay legitimate claims. They can force the policyholder to deal with multiple claims personnel and adjusters.

Some policyholders have found their claims denied "for taking too long," when a large part of the delay may have been the responsibility of the insurer.

If any of these topics sound familiar, you may need to speak with an attorney. An experienced insurance dispute lawyer can help sort out your coverage and assist you in dealing with your insurance company.

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