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.

Consumers or insurers with questions can call the Department of Insurance Consumer Hotline at 800-726-7390 or contact the department online at insurance.mo.gov

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.

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