The Houston Chronicle
Cliff McKelvy filed a claim in 2001 for water damage caused by a busted pipe under his laundry room.
Three years later, he has yet to see the claim settled by his insurer, State Farm.
In the meantime, the Bay City resident, who is himself a State Farm agent, and his wife have moved out of their mold-infested house and filed a lawsuit against State Farm to help spur a settlement of his claim. But even that, it seems, could play out for years in court.
“My house is still sitting over there vacant, with walls and ceilings knocked out,” said McKelvy.
“This is not the customer service they advertise.”
Although the most dramatic increase in justified complaints about delays are about auto insurance claims, many homeowners may have seen their home insurance claims delayed in recent years as mounting mold claims took their toll on insurers.
The Texas Department of Insurance saw the number of justified home insurance complaints jump to 969 in 2002 from 174 in 1999. The number dropped to 453 in 2003.
Insurers say mold hysteria led to a flood of claims that couldn’t all be handled as quickly as homeowners would have liked. The number of complaints will continue to decline as legislation passed in 2001 that limited required mold coverage take effect.
“Companies want to investigate those carefully,” said Jerry Johns, a spokesman for Southwestern Insurance Information Institute. “A lot of it had to do with the mold hysteria that prompted insurers to thoroughly investigate water claims so they wouldn’t have to go out and do it again.”
But consumer groups say insurers have little incentive to speed up the process, especially on small claims.
Instead, a worn out consumer will likely settle for much less down the road if they can’t find or afford an attorney to take their case.
“Insurers get to hold the money and reap the investment rewards,” said Doug Heller, of California-based Foundation for Taxpayer and Consumer Rights. “The insurance company may have the resources to fight this one out. What’s the low-income policyholder going to do but buckle to what the company’s willing to pay?”