Insurance companies respond to Biden call to help victims cover more costs

0

US President Joe Biden arrives to host a virtual briefing on Hurricane Ida in the South Courtyard Auditorium of the Eisenhower Executive Office Building at the White House in Washington, August 30, 2021.

Carlos Barria | Reuters

WASHINGTON – Two of the largest insurance companies in the United States have responded to President Joe Biden’s call to cover additional living costs for policyholders in Louisiana who evacuated their homes before Hurricane Ida, but failed were not subject to specific mandatory evacuation orders.

Allstate and USAA have both agreed to cover additional living expenses for state policyholders who evacuated their homes, a White House official told CNBC.

More companies are expected to follow suit, said the official, who requested anonymity to discuss the efforts still underway.

CNBC has contacted Allstate and USAA regarding the policy change. Representatives of the companies did not respond to a request for comment.

Typically, insurance policies only cover additional living expenses for policyholders who have been ordered to evacuate their homes before major storms, and not for those who choose to leave their homes voluntarily.

Biden first raised the issue Thursday in a White House speech on the storm.

CNBC Politics

Learn more about CNBC’s political coverage:

“Right now we are hearing reports that some insurance companies may deny coverage for additional living expenses unless the owner is subject to a mandatory evacuation,” Biden said.

Homeowners on the way to the storm, he said, “left their home because they thought it was a leak or a risk of death. There is nothing intentional about that.”

Biden then appealed to home insurers, “Do what it takes. Pay your policyholders what you owe them and cover the cost of temporary housing in the event of a disaster. Help those in need.”

The episode is a rare example of a US president shaming huge companies into changing a fundamental part of their operations – the way insurance companies assess eligibility for coverage.

The origins of the policy change can be traced back to Cedric Richmond, a former congressman from Louisiana who is a senior White House official from Biden.

In the days following the storm, Richmond heard from homeowners that their insurance policies would not cover the cost of temporary housing unless their homes had a mandatory evacuation order.

But even though Ida made landfall last Sunday as a Category 4 hurricane, evacuation orders varied considerably from parish to parish.

Some parishes on the coast, such as Grand Isle, have issued mandatory evacuations for all residents. But others issued evacuation orders that were only mandatory for people in low-lying areas, and voluntary in areas better isolated from flood waters.

In New Orleans, Mayor LaToya Cantrell issued an evacuation order that is mandatory for people living outside the city’s dike system, but voluntary for those protected by the dikes.

“We’re not calling for a mandatory evacuation because the weather just isn’t on our side,” Cantrell said on the Friday before the storm.

“We don’t want to have people on the road, and therefore in greater danger, for lack of time.”

Biden traveled to Louisiana on Friday to assess flood damage and meet with residents and first responders. Earlier in the week, he described a broad federal response to the storm, pledging to keep federal resources there “for as long as it takes.”

The home insurance industry’s leading professional group said its members are aware of the suffering Ida has caused and are eager to help.

Ida has devastated communities along the Gulf Coast and along the East Coast. Insurers acknowledge the tragedy and anxiety many American families, individuals and businesses face as wildfires and inclement weather rage amid uncertainty surrounding the pandemic, David Sampson, president and CEO of the American Property Casualty Insurance Association, said in a statement to CNBC.

“Insureds who have suffered damage should call their insurer as soon as possible to begin the claims process. Call your insurer if you’ve evacuated, whether voluntary or mandatory, to discuss your coverage. Policies may vary by company and state. ” he said.


Source link

Share.

Leave A Reply