Senate Hearing Uncovers Allegations of Insurance Claim Manipulation Following Hurricanes Helene and Milton
At a recent Senate Homeland Security and Governmental Affairs Committee hearing, significant allegations emerged regarding the handling of insurance claims in the aftermath of Hurricanes Helene and Milton. Testimonies from insurance adjusters and affected homeowners suggest that major insurers, including Allstate and State Farm, may have engaged in practices aimed at minimizing payouts to policyholders.
Adjusters Report Pressure to Undervalue Claims
Nick Schroeder and Clifford Millikan, both property adjusters employed by Pilot Catastrophe Services a third-party firm contracted by Allstate testified that they were instructed to alter or delete damage assessments to reduce claim amounts. Schroeder recounted instances where his evaluations were rejected or modified to lower coverage, stating, “This was definitely a pattern.” Millikan added that resistance to such changes often led to reassignment of claims to more compliant adjusters.
Homeowners Share Experiences of Undervalued Damage Estimates
Homeowner Natalia Migal from Sandy Springs, Georgia, described her ordeal after a 70-foot oak tree damaged her home during Hurricane Helene. Allstate initially offered $46,000 for repairs, a figure significantly lower than the over $500,000 estimated by her public adjuster. Eventually, Allstate settled for $100,000, a decision Migal attributes to pressure on adjusters to reduce estimates. The Washington Post
Insurance Companies Respond to Allegations
Representatives from Allstate and State Farm denied any wrongdoing. Allstate’s Vice President and Chief Claims Officer, Mike Fiato, explained that discrepancies in damage assessments were due to differences in evaluating structural versus aesthetic damages, with the latter not covered under Migal’s policy. He emphasized that adjusters can escalate disagreements to supervisors. State Farm’s Vice President of Operations, Michael Keating, stated that the company aims to accurately determine coverage based on collected information.
Senator Hawley Calls for Accountability
Senator Josh Hawley (R-MO) condemned the alleged practices, asserting that insurance companies are exploiting disaster victims for profit. He emphasized the need for accountability, stating,
“Insurance companies exist so that when disaster strikes, victims have somewhere to turn. But instead, big insurance companies are defrauding devastated families and profiting from their pain.”
Broader Implications and Regulatory Scrutiny
These allegations are not isolated. Similar complaints have surfaced following other natural disasters, such as Hurricane Ian in 2022 and recent wildfires in California. Issues include manipulated damage assessments, delayed or denied payments, and inconsistent evaluations by rotating adjusters. In response, California regulators are considering investigations into industry practices.
The hearing underscores the need for increased oversight and transparency in the insurance industry, particularly in the wake of climate-related disasters that are becoming more frequent and severe.
