Flood of problems from insurance ? Albany Times Union | Car ...

SCHOHARIE ? There is still a line of ruined homes on Main Street, marking destructive floods from Tropical Storm Irene that tore through the village six months ago.

Bill and Sherry Cherry were the only owners on their street who had federal flood insurance, but their 150-year-old, center-hall Colonial remains as trashed and uninhabitable as any of their neighbors? houses. His ruined appliances, furniture and household goods remain piled up on the driveway under a blue tarp.

On Monday, Bill Cherry shared a tale of insurance woe during a state Senate meeting on how the National Flood Insurance Program worked ? or in cases like the Cherrys failed to work ? in the aftermath of tropical storms Irene and Lee. The hearing was held by Sen. James Seward, an Oneonta Republican and head of the Insurance Committee.

?It was a brutal, bruising process,? said Cherry, who has a fair grasp of numbers and paperwork in his job as the Schoharie County treasurer. ?I can?t say that anyone who drives by my home and sees what it still looks like is going to be tempted to rush out and buy flood insurance. Yeah, look how well Bill did.?

The vast majority of people who lost property to the flood, where waters reached historic highs, did not have insurance. Cherry decided he ought to after seeing a television documentary about Hurricane Katrina, and then realizing he lived below the massive Schoharie Reservoir, which would devastate the village if the dam burst.

After Irene pushed 5 feet of water from Schoharie Creek through his home and left behind 6 inches of congealed mud and manure on the floors and in the basement, Cherry turned to his insurance.

He wrangled for months with an ever-changing cast of insurance adjusters and seemingly ceaseless paperwork demands from his carrier, Allstate. He went through at least eight adjusters, some from as far away as Florida and Alabama, and each time, the switch seemed to push his claim back in the paperwork process. He had to keep submitting receipts over and over again for small items, like his hearing aid.

When Allstate?s engineer said his collapsing foundation wall was not proof of structural damage, and the adjuster offered to pay him $15 for his extensive library of professional accounting and investment reference books, it was the ?last straw.?

He hired his own property adjuster and structural engineer, paying $35,000 out of pocket. And he ponied up another $15,000 to have his home gutted after the insurance adjuster told him a week after the flood that failure to do so would invalidate his insurance.

Cherry finally got Allstate, which had offered him a initial settlement of just $70,000 for his home and possessions, to pay $250,000 for structural damage after his own engineer?s report showed the foundation had been destroyed.

Cherry is still trying to reach a settlement for his possessions, and also faces a court fight after the firm he hired to gut the house later claimed the work cost $95,000.

?I am one of the lucky ones. My wife and I still had our jobs, and paychecks coming in. What about the guy who didn?t, and his double-wide gets destroyed. How can he afford to do what I did?? said Cherry.

Among the insurance industry executives and Federal Emergency Management Agency officials ringing the table during the meeting was Superintendent Benjamin Lawsky, of the state Department of Financial Services, which regulates the flood program.

Through mid-December, according to his office, the insurance industry paid about $546 million in claims from Irene and Lee, with about $146 million coming from the federal flood insurance program.

While there are cases of delays, ?the industry for the most part is doing a pretty good job,? Lawsky said. His office had no current data on how many flood claims might remain unsettled.

The most recent figures, from November, showed that of 92,600 storm-related claims filed, 78,600 had been paid, at least partially.

Lawsky said his office is considering regulatory changes to make flood insurance work better.

One would be to require that insurance companies assign a specific adjuster to remain on a claim,

Another reform, said Lawsky, would be to encourage FEMA to hold more training so adjusters can be certified in assessing flood damage. And finally, the superintendent said, the state would encourage people to get flood insurance.

Another senator at the hearing, John Bonacic, an Orange County Republican, said there are far too many cases like the Cherrys? where insurance coverage has been slow in coming. ?The flood insurance program is not working,? he said.

Bonacic said he was concerned there was a ?strategy by the insurance industry to hold out (on paying claims) for as long as they can, so they can keep investing the money? before making the lowest possible payment to homeowners.

Allstate Property Director Paul Tracey said that he ?was taken aback by your comments. There is no such strategy. We pay claims as fairly and quickly as we can.?

Another insurance industry executive, H. Neal Connolly, said that Cherry ?was fortunate that he bought the flood insurance policy, or he would have had nothing.? That prompted an audible snort from the audience, where several people tried unsuccessfully to interject during the meeting, which allowed only for invited testimony.

FEMA Supervising Claims Examiner Karen Christian said her office audits insurance companies to judge their performance. She offered no insights into the findings of such audits.

bnearing@timesunion.com ? 518-454-5094 ? @Bnearing10

Source: http://www.carinsurancesuite.com/job-insurance/flood-of-problems-from-insurance-albany-times-union/

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