Spotlight: Complaints against insurers rise

“Man, they made us mad,” Sherrill said.

The couple filed a complaint with the Georgia Department of Insurance. After nearly a year of phone calls, estimates, photographs and finally an assessment by an independent inspector, Allstate reversed its position. The company cut a check in May for $11,882 to replace the roof.

The Sherrills are among a growing group of Georgia homeowners forced to play hardball to get their homeowners insurance carriers to cover storm damage.

Inquiries to the Georgia Department of Insurance related to homeowners coverage almost doubled from 2007 through 2009. Complaints like the Sherrill’s nearly quadrupled during the same period. In most cases, homeowners who filed formal complaints prevailed and got claims paid, according to an Atlanta Journal-Constitution review of complaints.

Damage from the storm

An unusual number of Georgians are dealing with homeowners insurance matters because of an onslaught of violent storms in recent months that damaged houses with hail, wind and fallen trees.

“Insurance companies have lost a lot of money on hail claims over the last couple of years,” said John W. Oxendine, the state’s insurance commissioner.

Allstate spokesman Shane Robinson said the insurer handled a record number of claims across the Southeast this year due to 15 large storms during the first 16 weeks of the year. Robinson said Allstate handles claims “promptly and fairly,” leaving the vast majority of customers satisfied.

State Farm Insurance, Allstate and Georgia Farm Bureau Mutual Insurance Co. are the largest issuers of homeowners policies in Georgia, according to Oxendine’s office.

Oxendine said insurers have grown suspicious of hail damage claims because of a wave of unscrupulous roofing contractors who try to convince homeowners they can get their insurance companies to pay for new roofs, even if no significant storms hit their neighborhoods.

Homeowners should carefully review damage themselves “before going with the first guy that comes along and says ‘we’re in the roofing business and you need a new roof,’ ” said Dave Colmans, executive director of the Georgia Insurance Information Service, an industry trade group.

State Farm has paid more than $400 million in claims in Georgia this year from storms that produced hail, spokesman Justin Tomczak said. “State Farm thoroughly inspects all claims to insure that we pay those that are owed and avoid those that are not,” he said.

But some advocates for consumers say insurers are going beyond fraud prevention when processing claims.

“All over the country we are finding that carriers are being more adversarial and more stingy with their policyholders,” said Phillip Sanov, a Houston attorney who handles insurance cases across the country. Sanov represents Georgia clients whose insurers are denying storm damage claims. He said the insurers are adopting stricter standards than they used in the past to assess damage.

Hail damage claims usually involve less than $15,000 — a relatively small sum when it comes to insurance matters. “But for the policy holders, it’s all the money in the world,” Sanov said. “They can make their house their home again.”

Hail damage isn’t as obvious as a burned-out kitchen or a backyard fence knocked down by a fallen oak tree. Gutters and down spouts might show evidence of dings from a hail strike, but shingle damage is mostly evident from granules being knocked loose. Sometimes, a homeowner isn’t aware of damage until the roof begins to leak.

The size of the hail usually determines the damage. Pea-sized hail usually doesn’t hurt a roof. Golf-ball sized hail is another matter. Insurers routinely analyze detailed weather information to determine whether claims are legitimate, Colmans said.

Adjusting for differences

Allstate inspected Charles and Barbara Reeves’ Loganville home four times before agreeing to replace the roof. The couple became so frustrated that they filed a complaint with the Insurance Department.

The first Allstate adjuster spent 10 minutes on the roof before concluding there was no damage. The second adjuster disregarded pictures showing granules coming off the roof shingles during a rainstorm, the complaint stated. “He advised I could show all the pictures I wanted, but if HE didn’t see damage, then there was no damage,” Barbara Reeves wrote in the complaint. “He was very short with me and seemed in a hurry to leave.”

Meanwhile, the Reeves’ next door neighbor, also insured by Allstate, had a different adjuster assigned to his claim. In less than three weeks, the company declared the neighbor’s roof a total loss and paid the claim, Reeves said. The couple was perplexed, since the homes were built at the same time. “The hail, rain and wind hit no harder on our neighbor’s roof than ours,” they wrote in the complaint and wondered whether their age — 68 and 73 — somehow played into Allstate’s position.

Upon the fifth inspection, and with the Insurance Department complaint pending, Allstate finally determined a roof replacement was in order.

“For 34 years, we have had Allstate and that was our first claim,” Barbara Reeves said in an interview with the AJC.

She said the stubborn attitude and rudeness of those she dealt with inspired her to persevere. “It was just like nobody cared,” she said.

Robinson, the Allstate spokesman, said there are sometimes differences of opinion on claims. But he said Allstate is more than willing to work with its customers to try to resolve the issues. “Our customers, when they buy a policy from us, they ask us to be there in a time of need and we want to pay what we owe,” he said.

Allstate is not the only insurer that has frustrated some of its customers. Karen Fullerton and her husband took on State Farm after an April storm dropped quarter-sized hail on their neighborhood. After two inspections, State Farm said the roof was not damaged by hail. Fullerton said in her complaint that the first adjuster made statements suggesting that “all roofing contractors were crooks.”

Fullerton hired a home inspector to assess the damage and filed a complaint with the Insurance Department. State Farm eventually agreed to replace the roof. State Farm went out of its way to deny the claim, Fullerton said, but she prevailed because she had documentation to prove her case and she refused to give up.

In insurance matters, the complaints show, consumer persistence pays off. Georgians who filed complaints with the Department of Insurance ended up with payments of thousands of dollars on claims insurers originally denied.

“I had to fight to the very end,” Fullerton said. “You have to be your own advocate if you believe you have a legitimate claim.”

How to complain

If an insurance company initially denies a claim you feel is legitimate, ask for another adjuster to inspect the property.

Consumers also have the option of hiring a private inspector or “public adjuster” to assess the case. Public adjusters assess a claim and represent the policy holder’s interests.

To file a formal complaint against an insurance company operating in Georgia, go to the insurance commissioner's Web site. The Insurance Department's Consumer Services Division is open from 8 a.m. to 7 p.m. and is available at 404-656-2070 or via e-mail.

How we got the story

The Atlanta Journal-Constitution used the Georgia Open Records Act to gain access to consumer complaints filed with the Georgia Department of Insurance. The newspaper reviewed more than 100 complaint files related to homeowners insurance claims. The AJC interviewed consumers involved in complaints, as well as insurance companies and insurance experts.

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