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Up and down the Atlantic coast, people are telling horror stories about how long it has taken to get an insurance check for flood damage caused by Superstorm Sandy. Nearly 40 percent are still waiting for the final settlements they desperately need to rebuild.
The delays have prompted criticism from officials including New Jersey Gov. Chris Christie, who has blamed the bottlenecks partly on "excessive paperwork" requirements of the National Flood Insurance Program.
But federal data suggest that the speediness, or sluggishness, of the process may be linked to which insurance company is handling your claim.
Three and a half months after the Oct. 29 storm, some of the private-sector companies that service flood insurance policies for the government program have paid out on nearly all of their claims by now, while others have yet to hit the halfway mark.
Selective Insurance Co. of America, a New Jersey-based carrier hit with 18,599 flood claims after the storm, had been able to settle only 39 percent of those policies as of Monday, according to data collected by the Federal Emergency Management Agency.
By comparison, Allstate Insurance Co. had closed 94 percent of its 16,309 claims, paying out some $718 million to storm victims. That's far more than the $415 million distributed by Selective.
Such disparities make a huge difference to struggling homeowners.
After the floodwaters receded, Allstate sent a parade of adjusters and a building engineer to Danny Gallagher's home on Staten Island, a single-family ranch that had been washed off its foundation. He received a check for the full value of his $132,000 policy, minus his deductible, in around a month.
"My insurance company did very well by me," Gallagher said.
Meanwhile, Anthony Cavallo said he waited two months before an engineer hired by Selective visited his flooded home in Union Beach, N.J., to make a crucial assessment over whether the house could be salvaged. He said he is still waiting for a copy of the engineer's report, if it was ever finished, but last week finally received a check in the mail, marked "full and final payment," for $104,000. He said that is less than his policy limit and less than half of what it will cost to rebuild.
"I am beyond the horror of losing everything we own," said Cavallo, who has been living with his wife and daughter in a trailer parked in their driveway while the insurance struggles play out. "Tear the piece of crap down and let me move on with my life."
Selective declined to make anyone available for an interview but said in a written statement that FEMA's data "does not tell the entire story."
It said certified adjusters were in short supply and had extremely large workloads because of the massive number of claims. Many policyholders, the company said, also "do not understand the coverage," and were appealing payments unnecessarily.
So far, the National Flood Insurance Program has been hit with more than 138,000 claims related to Sandy. Companies participating in the program have collectively paid out $4.1 billion.
Selective is handling more Sandy-related flood claims than any other company. The bulk of its customers are in hard-hit areas of New Jersey, where claims might be extra-complicated because of the severity of the damage.
"Since Sandy, we have been working steadily to quickly and accurately handle claims," said a statement from the Branchville, N.J.-based company. "Many of our own employees, because we are headquartered in NJ and our largest regional office is in NJ, were impacted by the storm as well."
Insurance companies have little incentive to delay payment of claims.
Under the rules of the National Flood Insurance Program, the federal government ultimately foots the bill for all claim payouts. Insurance companies make a commission selling policies and are allowed to keep a share of the annual premiums to cover administrative costs, but have none of their own capital at risk when claims are paid or denied.
Insurers are paid a fee for processing claims, but they cannot collect until a claim is closed, meaning carriers that resolve things quickly get paid faster. Payments for approved claims are higher than they are for denials.
A few companies have pushed hard for quicker closures.
The USAA General Indemnity Co. has closed 83 percent of its relatively modest 3,261 Sandy flood claims, placing it second after Allstate in terms of the completion rate among companies handling a substantial number of storm claims.
Travelers Group has closed a less-stellar 58 percent of its 18,215 claims, but it also advanced more than $223 million to customers whose settlements have yet to be finalized. When those partial payouts are taken into account, it ranks among the companies that have paid the most to customers, with a total distribution approaching $602 million.
The Hartford Fire Insurance Co., according to FEMA, has closed a similar 56 percent of its 10,693 claims but has advanced much less in partial payments. So far, it has paid out just under $230 million, or an average of $23,588 per submitted claim, not including those later closed without payment. That ranks it alongside Selective in terms of the least money advanced so far when divided by the total number of claims. By comparison, Allstate's average payout per submitted claim is $50,845.
Hartford spokesman Thomas Hambrick said he couldn't discuss the company's handling of claims in detail, but added, "We take this work seriously and are working with FEMA to resolve flood claims from Storm Sandy as quickly as possible."
Drawing comparisons between the companies isn't entirely clear-cut. The statistics don't take into account factors like a company's mix of business or level of exposure to the storm. It is possible for an insurer to have paid less money to customers to date simply because its policyholders suffered less damage, or had purchased less coverage.
In a letter to New Jersey's congressional delegation this month, Gov. Christie blamed National Flood Insurance Program rules for leading to payment delays. He said the program's paperwork requirements were "extraordinarily extensive, requiring up to 12 hours for an adjuster to complete a single proof of loss form."
"Claimants whose houses have washed away are provided large and daunting forms requiring an itemization of each and every item lost as well as potentially requiring receipts and serial numbers for individual items," he said.
FEMA officials say they have tried to speed the claims process by giving insurers servicing flood policies additional flexibility to make partial payments.
Mulvihill reported from Haddonfield, N.J.