Group Criticizes Insurers Over Hurricane Response

A coalition of 100 public interest groups called insurers’ response to Hurricane Katrina troubling, saying the industry was unresponsive and tried to avoid obligations to policyholders hurt by the Gulf Coast storm.

Americans for Insurance Reform issued a report Wednesday citing client complaints about companies including State Farm Mutual Automobile Insurance Co. and Allstate Corp. Katrina, which devastated coastal areas of Mississippi and Louisiana, was the most expensive U.S. disaster, costing insurers as much as $60 billion, according to storm modeler Risk Management Solutions Inc.

The report condemned the industry for denying claims based on flood-damage exclusions.

Allstate spokesman Michael Trevino said adjusters had difficulty entering the hardest-hit areas and some policyholders were slow to submit claims.

State Farm spokesman Fraser Engerman said, “We have asked for patience and understanding throughout this process. We are very proud of the effort we have made.”