Federal Regulation

Insurance Commissioners and FEMA Should Adopt Accountability Measures to Ensure Fair, Timely Claims Settlements

CFA is Calling on FEMA and Insurance Commissioners of States Impacted by Hurricanes Harvey and Irma to Initiate a Public Accountability Program

Washington, D.C. — Today the Consumer Federation of America (CFA) called on the Federal Emergency Management Agency (FEMA) and the insurance commissioners of states impacted by Hurricanes Harvey and Irma to initiate a public accountability program. These programs will improve insurance company claims handling services as hundreds of thousands of Americans begin the process of rebuilding after the storms. CFA also urged Commissioners to seek public commitments from insurance executives that their companies will provide fair and fast claims services.

“As families rebuild, they deserve a public commitment from the nation’s insurance companies to hold up their end of the insurance bargain and pay claims quickly and fairly,” said J. Robert Hunter, Director of Insurance for CFA and former Administrator of the National Flood Insurance Program and Texas Insurance Commissioner. “Insurance Commissioners and FEMA must play a central role in holding these companies to account by keeping a public spotlight on their customer service over the next several months.”

Commissioners and FEMA Should Get the Data Consumers Need to See How Their Insurer is Doing in Settling Claims

The insurance commissioners of the impacted states (Texas, Louisiana, Alabama, Florida, Georgia, South Carolina and North Carolina) should immediately issue a claims servicing-related data call from each of the top 20 homeowners insurance companies in their state writing wind coverage under a homeowners insurance policy, CFA said FEMA should do the same in these states for the top 20 Write Your Own (WYO) flood insurance servicing companies. The data collected, at least once a week, should include:

  • number of claims filed;
  • number of claims closed without payment;
  • number of claims closed with payment;
  • number of claims denied;
  • number of claims in suit;
  • total dollar amount of disaster claims paid;
  • total number of complaints filed.

The Commissioners and FEMA should prominently post the data on their websites and update it weekly, so consumers, policymakers, and the media can assess the efficacy of each insurer in their state.

“This action will hold insurance companies accountable to the public and allow consumers to see the performance of their insurance company compared to other companies,” said Hunter. “Allowing consumers to see how their insurer is doing compared to other insurers is very important information. If their company is doing well overall, the consumer should be more patient before filing complaints with the commissioners or FEMA or initiating a lawsuit.  If their insurer is performing poorly, that signals to consumers that they should not wait to start action against the company,” Hunter said.

CFA pointed out that a similar process was instituted in New York State after Superstorm Sandy for wind claims.  There were few problems with these claims. FEMA did not institute a report card for WYO flood claims, however, and it has been well documented that the WYO flood insurance companies handled Sandy claims poorly.  Many Sandy WYO flood claims remained unresolved for several years.

Governors, Insurance Commissioners and FEMA Should Insist that Insurance Executives Publicly Commit to Fair, Fast Claims Service

Commissioners and FEMA should ask all major insurers to commit to fair and fast claims service, and company executives should join Commissioners in news conferences making these commitments public. CFA also suggested that the governor of each state should meet with the CEOs of insurance companies and exchange promises concerning the claims process. For example, the governors should promise to hold down demand surge price gouging by suppliers of materials and labor during the aftermath of these storms.  The CEOs should explain to the governor and the public exactly what they are doing to expedite claims resolution and to make sure that claims payments are fair and monitored from the top.  The insurers should commit to best practices of claims handling publically.

“Insurance executives must understand that they are personally accountable, as the face of their company, for the handling of these disaster claims,” said Hunter.

Contact: J. Robert Hunter, 207-864-3953; Doug Hunter, 310-480-4170


The Consumer Federation of America is a national organization of more than 250 nonprofit consumer groups that was founded in 1968 to advance the consumer interest through research, advocacy, and education.