Texas Harvey Recovery Czar Says Insurance Industry Needs to ‘Step Up’

The insurance industry in Texas is not happy with the state’s so-called Hurricane Harvey recovery czar.

Texas A&M University Chancellor John Sharp, who was named by Gov. Greg Abbott to lead the Commission to Rebuild Texas, drew a quick response from the insurance industry after asserting in an interview that private insurers and their representatives aren’t doing enough to help their insureds with their Harvey-related property claims.

In an interview with Texas Tribune CEO Evan Smith on Sept. 29, Sharp said that “too many times in this state, and it’s happened in other ones, is insurance agents are saying ‘let’s see how much money you get from FEMA’ … you know what, that’s bull***t. That’s not where the money’s supposed to come from. The first money needs to come from them.”

Stating that insurance agents need to “step up,” Sharp said: “They need to quit telling their clients, ‘Wait ’til you get the FEMA money,’ … They need to write a damn check.”

Sharp added that he has “hired a survey company to go in from one end of the coast to the other to see how extensive this is and when we find out how extensive this is, we’re going to let you know.”

Responding to Sharp’s comments, the Independent Insurance Agents of Texas (IIAT) took the opportunity in a written statement to clarify the role independent agents in the claims process.

“Independent agents are actively on the ground working tirelessly to help Harvey victims file and resolve insurance claims as expediently as possible,” IIAT President and Executive Director Marit Peters said in the association’s release. “Coordinating coverage among property, flood and wind policies, which are often insured through different companies, can be a complex process.”

The IIAT pointed out that insurers “pay claims when they are due under an insurance policy,” and said that according to the Insurance Council of Texas (ICT), an estimated $2 billion has already been paid out on insurance claims for Harvey-related flood damage to automobiles and wind damage to homes.

In a statement released by the ICT, that organization said Sharp’s comments are “troubling” not only because of the billions of dollars insurers have already paid on Harvey-related claims, but because insurance agents and agencies are not responsible for paying claims.

“Companies review and pay claims if due under the insurance policy,” said Mark Hanna, a spokesman for the ICT.

Hanna noted that ICT member companies have been serving customers in Harvey-impacted areas since shortly after the hurricane hit near Rockport late on Aug. 25. Insurers have set up mobile assistance stations and continue to receive claims and assist customers all along the Texas coast.

The Texas Coalition for Affordable Insurance Solutions (TCAIS), which represents major homeowners insurance companies doing business in Texas (Allstate, Farmers, Nationwide, State Farm and USAA), also weighed in on Sharp’s comments.

In a written statement, TCAIS Executive Director Beaman Floyd said that while Hurricane Harvey was still “impacting Texas, homeowners insurance companies brought in thousands of adjusters to begin assessing damage and to file and pay wind damage and automobile loss claims so that Texans could start their recovery.”

Floyd added that “insurance company representatives in Texas are working around the clock to help their customers understand their policy coverage and guide them to the right resources to get disaster assistance.”

While standard homeowners and renters policies do not provide coverage for flood damage, a comprehensive auto insurance policy would cover the insured vehicle for flood damage. Most flood coverage for residential properties is provided through a separate policy offered by FEMA’s National Flood Insurance Program.

Note: Guidance on applying for disaster assistance may be found at www.disasterassistance.gov and information on flood coverage processing can be found online.