Tuesday, May 22, 2018

Unpaid Claims Stifle Puerto Rico Businesses

By on February 12, 2018

Editor’s note: The following article originally appeared in the Feb. 8-14 print edition of Caribbean Business.

The stories are repeated time and again, all throughout Puerto Rico. Small- and midsize-business operations have been interrupted by Hurricane Maria’s devastating track across Puerto Rico. Any responsible businessowner would think the blow to his or her company would be somewhat mitigated by the disbursement of their insurance in a reasonable period. It is an insurance policy that the businessowner has probably paid for years, expecting the company to respond with the same efficiency as the customers who fulfilled their payment responsibilities.

However, after the wake of destruction left behind by this atmospheric phenomenon, and more than four months since it tore across Puerto Rico, the island’s leading insurance companies have thousands of businesses in a kind of limbo by not disbursing the corresponding insurance payments—and holding the local economy hostage—many businesspeople state. This situation has prompted many businesses to cease operations, leavings hundreds of families without an income and further affecting the already battered economy.

Two weeks ago, the Insurance Commissioner’s Office (OCS by its Spanish initials) indicated that 542 fines had been issued to a single insurer, out of the 14 companies of this type that deal with damage claims tracing not only to Maria, but also to Hurricane Irma, while stating that in subsequent weeks, more fines would be issued.

Despite the issuing of fines, businesspeople’s testimony attest to the precarious situation that has provoked delay in disbursement of payment on insurances policies. Furthermore, they said this situation could send Puerto Rico into an unprecedented economic abysm.

About 225,500 Puerto Rico insurance claims unsolved after Hurricane María

A flash survey conducted by the United Retailers Association (CUD by its Spanish acronym) of 185 of its members revealed that 92.7 percent of them have not received their claims, while 50.8 percent of them submitted their claim during October 2017 and 24.3 percent in September 2017. In the past weeks, this came after the Insurance Companies Association (Acodese) assured that for the month of January, it would have disbursed some $1 billion in policy payments.

According to the survey, the explanations from insurers to their clients ranged from proposed offers being well under the claim amount, that they are still in the review process or there is a high volume of claims to just simply refuse to offer a concrete reason for the delay.

Notwithstanding, in what is a curious fact, 99.4 percent of those surveyed said they had not filed a formal complaint with the OCS, even though the insurance commissioner has been emphatic in stating that without a formal complaint, it is impossible for that office to complete an investigation.

Meanwhile, 58.3 percent of those surveyed said the delay in insurance disbursements is greatly affecting operations while 32.74 percent say it is affecting them to a lesser extent and only 8.93 percent state it creates a minor impact.

Furthermore, the businesspeople surveyed highlighted complaints about the service and efficiency of these insurance companies, as well as an increase in costs to renew policies, even for clients that have yet to receive their disbursements.

–Read the rest of the story in CB’s epaper here.

 

 

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