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Assemblywoman Carol Murphy. (Photo: Kevin Sanders for New Jersey Globe)

Opinion: Puerto Rico Recovery Stymied by Irresponsible Insurance Companies

By Assemblywoman Carol Murphy, August 09 2021 11:51 am

OPINION

In September of 2017, Hurricane Maria ravaged Puerto Rico, the worst storm to strike the island in over 80 years. With 155-mph winds and extreme rainfall, the storm left nearly half a million residents without power for more than four months. Hurricane Maria caused over $100 billion in damages and is one of the costliest weather disasters in recorded history, second only to Hurricane Katrina. Before the storm, about half of Puerto Rico’s 3.4 million residents lived under the US poverty line, with limited resources to recover from the widespread destruction Maria left in its wake.

The insurance industry faced massive losses in Puerto Rico as a result of Hurricane Maria and legally have 90 days to process claims. However, despite individuals and small businesses counting on their insurance policies that they paid into with good faith to be there when they needed it most to finance the rebuilding of their properties, instead have been ravaged by a second front of the storm in the form of insurance companies ducking their legal responsibility.

The victims extended to hundreds of condominium owners and tens of thousands of residents in Puerto Rico who have not received payment for damages and have filed lawsuits as a last resort against their insurers. This tactic by the insurance companies has forced the insured to drain their savings, seek loans to make critical repairs, or, even worse, sadly struggle to accept structural damage like, a leaky roof, a tarp covering their windows and holes in the floor — that is a downright unacceptable reality. And, even the Puerto Rican government, who also were reliant on claims to keep basic services available to the people, have faced the same door slammed in their face by insurance companies refusal to honor their legal, not to mention moral obligation.

Sadly, this is not a unique approach. It is well known that postponing payment is a strategy that many insurers use to try to reduce the amount paid to policyholders for claims settlement. The insurance companies are taking advantage of this tactic in Puerto Rico as they have previously done to storm victims in St. Thomas and the British Virgin Islands.

Recently, United States Representative Darren Soto (FL-09) requested the House Committee on Natural Resources to hold an oversight hearing on the excessive number of outstanding private insurance claims from the damage done by Hurricane Maria in Puerto Rico. It is essential to get to the bottom of this now four year dereliction of duty to policyholders, but most importantly, Puerto Ricans need help to rebuild and move forward. The New York Times reported in February 2020 that an estimated $1.6 billion in insurance claims from Puerto Rico remain unresolved, and the Office of the Insurance Commissioner of Puerto Rico has levied fines of more than $2.4 million against several insurance companies for delays in resolution and payment of claims.

This is shameful, and I saw firsthand on a recent trip to Puerto Rico how badly the people are still hurting. It broke my heart to see, and the struggles that Puerto Ricans are still facing cannot be tolerated. We need our federal leaders to lead on this matter because while FEMA continues its work on the island, they can only assist eligible claims covered by private insurance companies after those settlements are closed.

This is a terrible situation that has victims facing a hurricane form of double jeopardy, devastated by Hurricane Maria and ravaged by insurance companies skulking away from their legal and moral obligations.

Puerto Rico deserves our help and we must lead them out of the darkness clouding the island for nearly four years.

Carol Murphy, Democrat of Mount Laurel, is the deputy majority leader of the New Jersey State Assembly and a member of the Oversight, Reform and Federal Relations Committee.

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