Community Corner

Malloy Seeks Lower Insurance Deductibles for Storm Damage

The governor's office and the state's Insurance Department are negotiating with insurers to decrease deductibles for Irene claims.

The state is negotiating with insurance companies to reduce deductibles for property owners who incurred damages during Tropical Storm Irene, Gov. Dannel P. Malloy said Friday.

Malloy, speaking at a press briefing this afternoon, said at least five insurance companies so far have agreed to decrease deductibles for those who file claims and the state continues negotiations with other major insurers.

The deductibles are an issue, Malloy said, because during a hurricane insurance companies can increase deductibles by up to 5 percent of a property’s fair market value. However, because Irene was downgraded to a tropical storm when it hit Connecticut, he wants insurers to reduce that deductible to normal levels.

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“The deductible issue became very important to me as I realized the extent of the losses to Connecticut citizens,” Malloy said.

Rough estimates put the total costs of just the insurance deductibles from Irene claims at about $100 million, he said.

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Malloy also said he continues to work on getting the federal government to declare Connecticut a disaster area, saying at least seven counties have reached the threshold for such a declaration. Officials with the Federal Emergency Management Agency are still in the state reviewing the storm damage.

And Malloy said he’s not focusing right now on whether to join calls for an investigation of how the state’s two major power companies handled their response to widespread power outages that resulted from the storm, something at least two lawmakers have called for.

“I’m concentrating on the issue at hand, which is we still have a large percent of our fellow citizens without power.”

The chief executives of the electric companies, CL&P and United Illuminating, said earlier in the day that they would cooperate with any such investigation.

Jeff Butler, president of CL&P, said company procedures call for an internal review of the response and that he would welcome the opportunity to work with state lawmakers on an external probe.

“We’d encourage it to get all the facts on the table.”

He and James Torgerson, chief executive of UI, made personal appeals to their combined 168,000 customers still without power Friday afternoon, nearly a week after Tropical Storm Irene struck.

“We know you’re frustrated,” Butler said during a media briefing in the State Armory in Hartford. “Personally, I’m frustrated too. We’re in the business of delivering power. So when you’re out, it’s frustrating to me.”

“We know you’re having great difficulty and we’re doing all we can to get the power back on,” added Torgerson.

As of early Friday afternoon CL&P still had 147,000 customers without power and UI had about 21,000. Torgerson said his company today is focusing its power restoration efforts in Easton, Fairfield and Hamden and expects to have fewer than 10,000 customers without power by the end of today.

Both said that as their work crews winnow the number of outages, restoration efforts will slow and become more laborious because crews are working more in “end of the line” areas of Connecticut’s electrical system, areas that service just a handful of homes or businesses.

“It slows down at the end because sometimes you’re literally working one-on-one” with customers, said Torgerson.

Butler reiterated that his company is projecting a 98 percent power restoration rate by Sunday, 99 percent by Monday and 100 percent by Wednesday.

He and Torgerson stressed that anyone still without power on Sunday should call their utility’s customer service center and make an outage report, particularly if they have neighbors who have power. Both said some utility customers might have damaged power lines on their property that the utility companies don’t know about.

Butler said that as of this afternoon, all but one town in Connecticut had all or portions of its power restored and that all town centers had their electricity, with the exception of the town centers in Sterling and Pomfret.  Sterling also was the only town as of this morning that still had 100 percent of its power out, he added. That’s because the town, which borders Rhode Island, lies at the end of a CL&P transmission line. However, CL&P crews were working in that town today and were expecting to restore some power to Sterling shortly.

Torgerson said UI, which serves towns in southwestern Connecticut, would have just 10,000 customers without power by the end of today and that all of his company’s customers would have their electricity back on by Sunday.

Butler also addressed criticism from many customers and some town leaders about a lack of information from CL&P about power outages and the restoration efforts. He said CL&P will review how it handled the flow of information, but said the severity of this storm made it difficult to inform the public because crews were still assessing the damages for days after the storm.

He said a worse scenario than not telling people when their power might be back on is to make an incorrect projection.

“Until you get those assessments done you’re not going to have good information.”

***

Update later Friday:

GOV. MALLOY, INSURANCE COMMISSIONER PRAISE CARRIERS FOR WAIVING HURRICANE DEDUCTIBLES   (HARTFORD, CT) – Governor Dannel P. Malloy and Insurance Commissioner Thomas B. Leonardi today announced that the Administration has been working closely with the insurance industry in wake of Tropical Storm Irene to address the issue of higher-cost hurricane deductibles that may be applied for some damages on coastal properties.  As a result, the majority of the companies that write homeowners policies in Connecticut, including the Travelers and The Hartford, will be waiving the higher cost deductible.   “We should all be mindful that as our state and citizens continue to recover in these difficult economic times, there are some business decisions that could be extremely burdensome if imposed at the wrong time.  I believe this is that time,” Governor Malloy said.  “I applaud those companies who are waiving the deductible and commend them for taking this tremendous step of corporate goodwill.  Failure to do this would result in many homeowners paying tens of thousands of dollars out-of-pocket.”   Commissioner Leonardi said some carriers have outright waived the deductible even though their policy language permitted it; others did not invoke it because their policy triggers were not met.   “I am asking all other carriers to follow the lead of those in the industry, who I believe in this instance, have done the right thing and waived the hurricane deductible.  There is no question that Connecticut was hit by a damaging storm, but it wasn’t a hurricane when it reached us,” Commissioner Leonardi said.   Commissioner Leonardi said talks are ongoing with other insurance carriers to resolve the issue.  The Commissioner said the Attorney General and Department of Consumer Protection are also looking into the matter.  Currently, 17 companies that have nearly 70 percent of the homeowners market throughout Connecticut are not invoking the hurricane deductible on coastal policies.   Going forward, Commissioner Leonardi said the underwriting guidelines that permitted these deductibles will be changed and tightened.   “They currently do not carry the force of a regulation or statute and I will be reviewing whether legislative changes may be necessary,” Commissioner Leonardi said.   Companies that have waived the hurricane deductible:  

  • ACE
  • Fireman's Fund
  • Hartford
  • Liberty Mutual
  • MiddleOak
  • Nationwide
  • New London County Mutual (NLC)
  • Safeco
  • Tower
  • Travelers
  • Utica National
  • Utica First
  • Vermont Mutual

  Companies not applying the hurricane deductibles because triggers were not met:  

  • Chubb
  • Hanover
  • Kemper
  • Peerless
 


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