Homeowners Insurance Carriers

State Warns Insurers About Unreasonable Deadlines in Joplin, MO

(Jefferson City, MO) -- the state of Missouri has a warning for insurance companies:  don't put unreasonable deadlines on Joplin homeowners.

The department of Insurance says some homeowners' and commercial insurance policies have deadlines for rebuilding.

But, considering the mass devastation in the city, the department says those deadline are unrealistic.

While some companies have extended their deadlines, others have not.

The department says imposing six-month deadlines or a decrease in benefits could result in an unfair settlement. That is illegal under Missouri law.

"The insurance industry has done a commendable job responding to the tornado, having paid more than a billion dollars in claims so far," says director John Huff. "At the same time, Missouri law requires insurers to provide prompt, fair and equitable settlements to their policyholders, and rigid deadlines may violate that law."

The state says so far, insurance companies have paid out $1.1 billion in claims.

It expects that total to rise to $2 billion.

Missouri state regulators to insurance companies: Joplin ...

November 28, 2011

Missouri state regulators to insurance companies: Joplin homeowners need more time to rebuild Department of Insurance says denying full benefits could violate Missouri law

Jefferson City, Mo. - The Missouri Department of Insurance says some insurance companies are putting unreasonable timelines on Joplin homeowners trying to rebuild after the May 22 tornado. Six months after the storm, the department issued a bulletin to the industry saying many home and business owners can't be expected to rebuild within the time limits required by some homeowners and commercial insurance policies.

In the bulletin, John M. Huff, director of the Department of Insurance, cites the unprecedented scale of the Joplin tornado, which delayed many consumers from accessing their property and led to a temporary building moratorium. He also describes the widespread devastation that has left the Joplin area with a shortage of contractors and materials. Huff says this has made it impossible for many property owners to rebuild within six months, which some insurance policies require before paying full benefits.

Bulletin 11-06 says that while some insurance companies have already extended their time limitations, others have not. And the application of some policies' shorter time limitations could result in an unfair settlement, which is illegal under Missouri law. The bulletin issued by Huff on Tuesday says insurance companies attempting to enforce deadlines of less than one year may face legal action by the department.

"The insurance industry has done a commendable job responding to the tornado, having paid more than a billion dollars in claims so far," said Huff. "At the same time, Missouri law requires insurers to provide prompt, fair and equitable settlements to their policyholders, and rigid deadlines may violate that law."

Insurance companies have paid more than $1.1 billion in homeowners, auto and commercial property claims related to the Joplin tornado. Huff expects that number to approach $2 billion by the time all claims are settled. Policyholders have filed nearly 18,000 insurance claims.

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