Gulf of Mexico
Part of a house still lay submerged in a canal in Mexico Beach two months after Hurricane Michael. DOUGLAS R. CLIFFORD | Times (2018)

Hurricane Michael destroyed their homes. Then the insurance heartache began.

Nine months after the storm, more than 20,000 property claims remain outstanding in Florida.

PORT ST. JOE — When Michael McKenzie and Marci Brannen returned home three days after Hurricane Michael, a toppled pine tree lay across their entrance just a few blocks from the water.

Branches poked through the broken roof like fingers in aluminum foil. The force had cracked their concrete-block foundation. Water stains inside the one-story reached a foot and a half high.

The couple figured insurance would take care of them. Before they even knew the extent of the damage, they filed claims from her parents’ home in Georgia.

Their wind insurer offered $16,000 for a new metal roof, which would also need repairs to the trusses and framework underneath. That was barely more than they had recently paid for the tin alone.

They hired a public adjuster and later contacted a lawyer to bolster their claims. An independent engineer declared the house structurally unsound, so the couple paid to tear it down.

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The estimate to rebuild: as much as $400,000.

Nine months after the storm, McKenzie said, they have received just about $120,000 for the building from their two insurers combined.

“Neither one wants to pay what I feel like they both owe me,” he said.

The home of Michael McKenzie and Marci Brannen in Port St. Joe after Hurricane Michael. (Courtesy of Michael McKenzie and Marci Brannen)
The home of Michael McKenzie and Marci Brannen in Port St. Joe after Hurricane Michael. (Courtesy of Michael McKenzie and Marci Brannen)

Across the Panhandle, from Panama City to Port St. Joe, north through Blountstown and into Marianna, residents are battling insurance companies. They complain about unanswered calls and payments that are too small or too slow. Michael launched more than 147,000 claims in Florida, according to state data, carving a long trail of ruin as the first storm to strike the United States with Category 5 force since Andrew.

McKenzie is an accountant, meticulous with numbers but still struggling to navigate the process. His clients tell him they have the same problems.

The couple stays on the empty lot, in a trailer that rocks whenever one of them moves. McKenzie, 43, said he’s gotten the bank to delay payments on the mortgage. Brannen, 34, wonders when she’ll live in a house again.

They feel abandoned by their insurance carriers. And they can't help thinking, “Why do you pay premiums?”

Marci Brannen, 34, left, and her fiancee Michael McKenzie, 43, stand in the location of their house prior to the landfall of Hurricane Michael. The home was deemed a total loss, which has prompted a battle between them and two insurance companies that hold their wind and flood policies. DOUGLAS R. CLIFFORD | Times
Marci Brannen, 34, left, and her fiancee Michael McKenzie, 43, stand in the location of their house prior to the landfall of Hurricane Michael. The home was deemed a total loss, which has prompted a battle between them and two insurance companies that hold their wind and flood policies. DOUGLAS R. CLIFFORD | Times

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Billboards advertise law firms and public adjusters along U.S. 98 from Port St. Joe into Mexico Beach as the disaster economy churns. Blame is a currency as much as the dollar.

More than 97,000 of the insurance claims from Michael relate to residential property, another 11,000 to commercial. The state lists the majority as settled, according to the Office of Insurance Regulation. About 21,000 remain outstanding. That almost certainly undercounts the number of unsatisfied customers; residents can seek to reopen claims that insurers might initially report as closed.

HURRICANE MICHAEL INSURANCE CLAIMS IN FLORIDA

Source: Florida Office of Insurance Regulation (as of May 31)

TypeClaimsClosed (Paid)Closed (Not paid)Still OpenResidential97,48467,67913,16916,636Commercial11,1214,0392,3454,737Total (including private flood, business interruption and other lines of business)147,325104,19919,93223,194

The post-storm quagmire pits a pair of Florida’s most powerful special interests — insurance companies and trial lawyers — against each other. Residents are caught in the middle, hoping to be made whole.

HELP YOURSELF: Hurricanes, home insurance and how to make sure you’re prepared

In McKenzie and Brannen’s case, they paid about $2,600 in premiums each year between their flood carrier, Tower Hill, and wind insurer, Gulfstream. They viewed that as a promise they would be covered in a disaster. Combined, they said, their policies could pay out a maximum of about $300,000.

Now, they’re fighting to get close to that much.

Lawyers call the insurers greedy, driven by bottom lines instead of moral centers. They track stories of clients offered just a few thousand dollars, only to receive tens or hundreds of thousands more when they use legal letterhead.

“Insurance carriers are not in the business of paying out claims,” said Jeff Carter, a Panama City lawyer who lost his home to the storm. “No business ever made a profit by letting all the money go out the door.”

Insurers counter that attorneys take a chunk of the money they help a client win. Public adjusters, third-party contractors who work with property owners to conduct independent damage analyses, charge up to 10 percent.

“I’m puzzled why lawyers who say they have their consumers’ best interest at heart encourage people to file a claim that 33 cents of every dollar goes in that lawyer’s pocket,” said Lisa Miller, a consultant to carriers and former Florida deputy insurance commissioner.

READ MORE STORIES ABOUT HURRICANE MICHAEL

Individual cases drag on for months. More than a year after Hurricane Irma spun through Florida, about 76,000 of a million insurance claims remained open.

Sen. Jeff Brandes, a St. Petersburg Republican and member of the banking and insurance committee, said residents can seek appraisals and mediation to sort out disputed claims. He advised people to learn about their policies and the claims process, so they view insurance "as a partnership before it’s confrontational, before the storm.”

Signs advertise a local claims adjuster near Mexico Beach. DOUGLAS R. CLIFFORD | Times (2018)
Signs advertise a local claims adjuster near Mexico Beach. DOUGLAS R. CLIFFORD | Times (2018)

It’s difficult to get a true sense of the gap between what people feel they are owed and what they have been paid. Florida estimates Hurricane Michael caused $6.6 billion in insured damages and so far insurers report paying $5.6 billion for claims. Some companies mark their detailed filings “trade secrets,” muddying the picture of which insurers have the most open claims and where the remaining billion dollars might come from.

Attorneys soon expect some Hurricane Michael disputes to escalate into civil lawsuits for breach of contract.

Such cases are sometimes signaled by Civil Remedy Notices filed with the state, which put carriers on the clock to respond to demands for fair payment. More than 900 have been filed after Michael.

Carter, the Panama City lawyer, said some in the Panhandle are reluctant to go to court, leaning on generational independence and a belief that parties will hold up their ends of a contract.

“They’re just wringing their hands,” he said, “waiting for the carriers to do the right thing."

• • •

Hundreds of buildings in Mexico Beach were destroyed by Hurricane Michael last October. The town remained in a suspended state of destruction two months after landfall. DOUGLAS R. CLIFFORD | Times (2018)
Hundreds of buildings in Mexico Beach were destroyed by Hurricane Michael last October. The town remained in a suspended state of destruction two months after landfall. DOUGLAS R. CLIFFORD | Times (2018)

Here’s how insurance typically works after a hurricane:

Residents with coverage file claims, possibly for the first time, through policies they’ve never read, to company representatives with whom they’ve never spoken. Field adjusters examine properties, then input what they see into a program that computes damage and rebuilding costs. Some insurers kick those reports back to the office, where a desk adjuster reviews the analysis, and the carrier decides what to pay.

The process seems clear and specific, but critics say neighbors endure drastically different experiences after a storm, based on subjective reasoning. The quality of a single field adjuster can affect a claim. After Michael, lawyers said, adjusters who never worked in a major hurricane misunderstood damage or conducted incomplete assessments.

“The policyholder bought a promise that if something happened, they were going to be taken care of,” said Ron Delo, a longtime public adjuster. “They didn’t buy a spot at the slot machine.”

Several insurance companies declined or did not respond to requests for comment for this story.

Delo said he has heard of field adjusters having their valuations reduced by desk adjusters who make recommendations without even visiting a property.

He gave a quick hypothetical: Water damages the walls of a home, which now must be discarded. The process of removing drywall damaged by fresh water is different than that damaged by contaminated saltwater. The price of removal could rise from 35 cents to $1.35 per square foot — but how much money a resident gets hinges on how the adjuster inputs data.

Read full Tampa Bay Times article . . .