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The calls flooding into state insurance departments today from victims of El Nino-related weather disturbances make it clear that tens of thousands of Americans still have a long way to go before they can fully put behind themselves the tornadoes, floods, ice storms, hail and other weather disturbances of the 1997-1998 winter and early spring. Even though weather experts agree that the worst of the current El Nino may already have come and gone, homeowners and business operators across America are still picking up the pieces, dealing with insurance company denials, shady repair contractors, and other woes. Other consumers have learned the hard lesson of what it means to be inadequately insured for the kind of devastation brought about by El Nino.
A survey by the National Association of Insurance Commissioners (NAIC) of more than 20 state insurance departments turned up dozens of examples of how these consumer protection agencies are responding with aggressive and creative approaches to aid consumers who are struggling to put weather-related problems behind themselves. The following are typical examples of state insurance departments in action in the aftermath of El Nino:

  • California. As part of its undercover investigation of El Nino-related scams, the California Insurance Commission announced on February 24th the arrest of an unlicensed contractor for insurance fraud. A 45-year-old Santa Ana man was arrested for installing bogus solar heating systems in storm-damaged homes. The suspect told undercover investigators staking out a Long Beach home how they could get a new solar heating system by allowing him to submit a phony repair estimate to their insurance company for a non-existent solar system. According to investigators, the alleged con artist described in detail how he could provide the remnants of a damaged solar heating system to the residence and make it appear that the recent storm had blown the system off the roof. California Insurance Commissioner Chuck Quackenbush said: "I can only hope that other scam artists and unlicensed contractors will take notice of today's arrest and that they will think twice before attempting to defraud honest homeowners and businesses of this state."
  • Colorado. When a Pueblo woman experienced extensive hail damage to her home, she submitted a damage claim to her new insurance company. The woman had recently switched carriers but did not go "uncovered" for any period of time. Her new insurer claimed it was old damage, and her previous insurer maintained that the hail damage was new. The Colorado Department of Insurance investigated and determined that the claim should be paid since coverage had not lapsed. After much discussion, the claim amount was split by both insurers and paid.
  • Florida. In the wake of tornadoes in late February that destroyed 2,000 homes and left 30 dead in the central part of the state, the Florida Insurance Commission ordered that insurance companies providing coverage to tornado victims not charge more than the standard, minimum deductible on home damage claims. Aimed at resolving disputes before they arise and saving storm victims thousands of dollars in potential deductible costs, the state directed companies to charge no more than the $250 or $500 deductibles applied to most homes. Currently, many insurance companies in Florida can charge higher deductibles -- ranging from 2 percent to 10 percent of a home's insured value-on damage claims stemming from windstorms. "We do not want insurers misinterpreting or bending any rules on homeowners insurance, especially at a time like this," State Insurance Commissioner and Treasurer Bill Nelson said.
  • South Carolina. When a tornado ripped through Lexington County in late 1997, a woman and her family suffered major damage to their mobile home. While the insurer responded quickly, it offered the woman a settlement of $3,911, even though the damages had been estimated in excess of $8,000. Following a request for a reassessment by the South Carolina Insurance Department, the insurer issued a check that raised the total settlement to about $8,000. The woman and her family were able to restore their mobile home to a livable condition.

This "Insurance Consumer Alert" is intended to provide Americans with the basic information they need to cope with the aftermath of El Nino. For those who already have suffered damages resulting from severe weather, the "Alert" provides tips about what to do next. And for those who have so far escaped weather-related problems, the "Alert" explains what steps to take now in order to be prepared in the future.


El Nino is an abnormal warming of the ocean temperatures across the eastern tropical Pacific that triggers weather changes around the globe. The warm tropical ocean waters were first noted in March 1997 and quickly strengthened to become one of the most pronounced El Nino events on record.
According to the National Oceanic and Atmospheric Administration (NOAA), the warm waters will begin to return to normal temperatures throughout the summer and into early fall. The likelihood of a La Nina, the period when the tropical Pacific is much colder than normal, developing this year is low. The impacts of a cold event on the United States are nearly opposite to those observed during El Nino. One of the worst El Nino disturbances to hit the United States came in the winter of 1992-1993, when property damage estimates reached $10 billion.
Why is El Nino-induced bad weather such a major concern? Even under generally good weather circumstances, almost any American can suffer serious damage from some combination of floods, tornadoes, hurricanes and other conditions. Because most of these problems usually only crop in a serious way on an infrequent basis, many homeowners don't know about the risk ... or make the mistake of taking comfort in the false assumption that they can ignore it. But that just isn't the case. Flooding takes place every year to some extent in all 50 states. Damaging high winds have caused destruction from one end of the nation to the other, particularly in the Midwest and coastal areas.


Even though El Nino's winding down, many Americans are still reeling from late winter and early spring weather problems. If you are one of them, take the following steps:

  • Get the wheels in motion! Contact your insurance company contact immediately to report your loss. If you have flood insurance, start by calling your insurance agent to report your claim. The agent will prepare a Notice of Loss form and an adjuster will be assigned to assist you. Follow the instructions given to you by claims personnel. Since there may be a lot of people needing help at the same time, anything you have done before the disaster to prepare for a loss will all be to your benefit now.
  • Take notes. Start from the beginning to keep a log of the people you spoke to, when, and summarize your conversation. Ask questions if you do not understand instructions. If possible, photograph the outside of the premises, showing the flooding and the damage. Also, photograph the inside of the premises, showing the damaged property and the height of the water.
  • Figure out extent of damage. Separate the damaged from the undamaged property and put it in the best possible order for the adjuster's examination. If possible, protect the property from further damage.
  • Wait for the adjuster to arrive! Do not call anyone to repair or replace your loss without first getting instructions from your adjuster since your insurer's visual inspection of your loss may be necessary before repairs are undertaken. Do not throw away damaged property until your adjuster advises you it is all right to do so. If your home is damaged, make only temporary repairs until a claims adjuster looks at the damage. Making permanent repairs before the adjuster's inspection could trigger a denial of your claim.


After almost every major storm, some consumers will feel that insurers have improperly rejected their claims or unduly delayed payment of settlements. Here's how to proceed if you think that your claim is being unfairly denied:

  • Review the terms of your policy. Insurance policies are written to very specific specifications. It is usually a fairly simple matter to determine whether the policy covers a specific weather-related problem.
  • Appeal to your agent or the insurance company's claims manager. Explain your side of the matter. Provide copies of supporting documents. Also, send a letter and documents to the claims executive at the insurance company's headquarters whose address is usually found on the first page of the policy.
  • Contact your state insurance department. If after hearing from your insurance company's claims executive, you still feel your claim hasn't been handled properly, it's time to contact the state watchdog agency for insurance consumers (The Maine Bureau of Insurance can be reached at 207-624-8475 or 1-800-300-5000). You can find the telephone number by calling information for your state capitol city. Or, visit the NAIC Web site at for a complete listing of all state insurance departments. Explain your situation to the consumer representative at your state's insurance department. They will discuss the matter with your insurer and help to resolve any difference so the claim can be settled.
  • If necessary, consult an attorney. If you decide to hire an attorney, provide them with a copy of your insurance policy and all other relevant documents. If the insurance company has made a settlement offer, tell your attorney about it and ask if they believe that a lawsuit will help you get a larger settlement. Make sure that you understand your attorney's fee structure in writing before you decide to pursue the case. If you hire an attorney, you will no longer deal directly with the insurance company. Your attorney must have your agreement before committing to any settlement.


You are at your most vulnerable when disaster strikes. For example, when it comes to flood insurance, you need to be sure that you know the difference between public and private adjusters. Private adjusters are either employees of insurance companies or non-employees who contract directly with insurance companies. When disaster strikes, an insurance company often will send a private adjuster to appraise the loss and determine the amount of damages that have been suffered.
Public adjusters deal directly with people who have flood insurance. Their commission, typically 10 percent, is deducted directly from any insurance proceeds paid to the consumer. Like the private adjuster, the public adjuster appraises losses to determine the amount of damages involved. North Dakota Insurance Commissioner Glenn Pomeroy warns: "Some public adjusters will promise people that they can negotiate a better settlement from the insurance company because they work for the consumer. However, the settlements are not uniformly better than those achieved by private adjusters, plus the commission payment is always deducted from the claim settlement offered by the insurance company." For more information about dealing with private and public adjusters, contact your state insurance department.
What can you do to find a quality contractor in the wake of a weather-related disaster? Consider these tips:

  • Watch out for fly-by-night operators! Be wary of builders or contractors who go door-to-door selling their services, especially those who are not known in your community or offer dramatically reduced prices because they've supposedly just completed work nearby and claim to have materials left over.
  • Make sure you are working with a credible firm. Deal only with licensed and insured contractors who have general liability and workers' compensation insurance. Investigate the track record of any roofer, builder or contractor you're thinking of hiring. Ask friends, relatives, neighbors, co-workers, insurance agents or claims adjusters for recommendations. Consult your Better Business Bureau to see if there are any complaints on file about the individual or company in question.

Don't participate in a scheme to submit a phony insurance claim. You may be tempted by the promise of making some quick money, but you probably would be judged every bit as guilty as the swindler.


El Nino will be long remembered for bringing unexpected weather problems to many parts of the United States. When flash flooding caused extensive damage in October 1997 in the Houston area, thousands of homeowners were caught off guard. According to the Texas Insurance Commission, only about 10 percent of the Houston homes were covered by the National Flood Insurance Program. Widespread flooding in Kentucky in 1997 resulted in 20 deaths and thousands of people being left homeless. Even though Kentucky is second only to Alaska among U.S. states in terms of natural riverways, the vast majority of at-risk homes in the state remain uninsured, according to the Kentucky Department of Insurance. According to the Federal Emergency Management Agency (FEMA), only 21 percent of flood-jeopardized homes in the Bluegrass State are covered today by the federal flood insurance program.
What can you do to prepare for a weather-related disaster? Here are some tips:

  • Review your insurance coverage to make sure it is adequate. Hurricane damage is covered under standard homeowner's policy, but it is important to insure your home and belongings to their full replacement cost. Flooding is generally not covered under standard homeowners policies, so ask your agent about the National Flood Insurance Program. If you rent a house or apartment, talk to your agent about purchasing a renter's insurance policy if you don't already have one.
  • Learn the facts about flood insurance. You can protect your home, business, and belongings with flood insurance from the National Flood Insurance Program. You can insure your home with flood insurance for up to $250,000 for the building and $100,000 for your contents. The average flood insurance policy costs about $300 a year for about $100,000 of coverage. (A disaster home loan can cost you more than $300 a month for $50,000 over 18.5 years!) You can buy NFIP flood insurance from private insurance companies and agents. Whether you rent or own your home or business, make sure to ask your agent about contents coverage. It is not automatically included with the NFIP building coverage. There is usually a 30-day waiting period before the flood coverage goes into effect. For more information, contact NFIP at 1-800/638-6620 or visit them at on the Web.
  • Plan now for a future claim. Inventory your personal property, including all model names and serial numbers. Do not overlook items you use seasonally or infrequently and store in out-of-the-way places: special china and silverware, holiday decorations, summer and winter sports equipment, carpentry tools, and baby-care furnishings. Attach sales receipts and photograph or videotape each room. Store the information off the premises, such as at work or in a bank safe deposit box. Keep readily at hand the telephone numbers of your insurance agent, your insurance company's local claims office, and its home office.

While state insurance departments do not run the National Flood Insurance Program, they do often oversee the industry professionals who sell the policies and handle claims. State insurance agencies get very actively involved in working with flood victims, FEMA officials, and others in the event of natural disasters.

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Last Updated: August 22, 2012