Tag Archives: insurance

Change in New York State law to usher in ‘tidal wave’ of child sex abuse lawsuits

New York Governor Andrew Cuomo speaks during a news conference in New York, U.S., September 14, 2018. REUTERS/Shannon Stapleton

By Tom Hals

(Reuters) – Thousands of child sexual abuse lawsuits are expected to flow into New York State courts in the coming weeks exposing decades-old misconduct at schools, hospitals, churches and youth clubs, according to lawyers for victims.

On Aug. 14, the Child Victims Act takes effect, giving people one year to sue over allegations of sexual abuse, regardless of when they said it occurred.

Under the law signed by Governor Andrew Cuomo in February, New York has gone from one of the toughest states to bring a case because of its strict statute of limitations to one of the easiest, potentially unleashing decades of unresolved claims.

“It’s going to be a tidal wave of litigation,” said lawyer Mitchell Garabedian, best known for representing victims of child abuse by Roman Catholic priests in the Archdiocese of Boston.

Cases will cut across society, illustrating the systemic nature of the abuse, victims’ lawyers said, although they expect many of the lawsuits to be against Catholic organizations and the Boy Scouts of America.

Both the scouts and the church said they were cooperative with people making allegations of abuse against their organizations.

“We believe victims, we support them, we pay for counseling by a provider of their choice, and we encourage them to come forward,” the Boy Scouts of America said in a statement.

New York State Catholic Conference spokesman Dennis Poust said that Catholic leaders dropped opposition to the new law once it was broadened to include public institutions.

“All survivors deserve to be heard,” Poust said.

The Child Victims Act arrives as victims have been empowered by the #MeToo movement and a steady stream of scandals, exposing a range of abusers from public figures to the team doctor of USA Gymnastics.

Lawyers for victims said they were teaming up to maximize resources and reconnecting with old clients whose cases were barred by the statute of limitations.

Jeff Anderson, who specializes in clergy sex abuse cases, said his law firm has dedicated almost 100 people to New York cases.

‘COME FORWARD’

After several states made it easier to sue, TV ads soliciting child sex abuse lawsuits spiked to more than 1,700 in both March and April, up from just 46 in January, according to X Ante, a consulting firm that tracks lawyer ad spending.

“If you were abused in a scouting program you are not alone,” said an ad by San Diego, California-based AVA Law Group, which X Ante said was one of the most frequently broadcast. “Come forward. New laws may allow you a path to significant financial compensation.”

However, victims and advocates often say the money is secondary, and many sue to expose perpetrators, hold organizations accountable and to further the healing process.

Some organizations, including the Boy Scouts of America, are acknowledging abuse, apologizing and reporting the accused to law enforcement authorities.

Others have offered compensation. The Archdiocese of New York has paid $65 million to 325 people since 2017. Only one person rejected an offer, according to the archdiocese.

Those who accept an offer give up their right to sue. Some victim advocates said compensation programs kept stories of abuse secret.

“I think the potential is huge for all kinds of things coming to the surface like we’re seeing with Epstein,” said victims’ attorney James Marsh, referring to the criminal sex trafficking charges against the once politically connected American financier Jeffrey Epstein. He pleaded not guilty and is jailed pending trial.

Victims’ lawyers said insurance policies will provide a significant amount of money. The Archdiocese of New York and the Boy Scouts of America have already become embroiled in disputes over insurance coverage.

The Travelers Cos have said they are planning to bolster reserves related to laws reviving old abuse claims.

Coordinating scores of lawsuits against an organization could also be difficult, although few New York cases are expected to go to trial.

Many lawyers said they expect organizations to file for bankruptcy, which would stop the litigation and create one forum where all the claims can be settled at once.

“Bankruptcy is the way to go,” said lawyer Tim Kosnoff, who specializes in cases against the Boy Scouts. “Most clients come out of it pretty satisfied.”

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Grant McCool)

YOUR MONEY: Renovating after a natural disaster? Planning is key

FILE PHOTO: Damage caused by Hurricane Michael is seen in Mexico Beach, Florida, U.S., October 16, 2018. REUTERS/Terray Sylvester/File Photo

By Beth Pinsker

NEW YORK (Reuters) – For the Parkers of Houston, Texas, there will be no summer vacation this year because they are still paying off the dent in their finances left by 2017’s Hurricane Harvey.

The couple joins a growing list of people forced to renovate or completely rebuild their homes after a natural disaster, as severe weather events wreak damage throughout the country and spending in their wake drags out over multiple years.

Fixing up homes after a natural disaster barely used to register in home renovation data. A new survey released June 5 by the home site Houzz.com shows that 6% of home renovators in 2018 were addressing damage from a natural disaster, which jumps to 12% for such renovations over the past five years.

Regionally, those numbers are continuing to climb, said Nino Sitchinava, Houzz principal economist, particularly for California, Texas and Florida.

The Joint Center for Housing Studies of Harvard University has also been looking into the impact of natural disasters on the home renovation market.

“We’ve been studying home improvement for 25 years and losses from national disasters haven’t been on the radar. Suddenly, we’re seeing this pop up as a significant share,” said Kermit Baker, director of the remodeling future program at the Harvard center.

In 2016-2017, the most recent year reported by the center, spending on disasters repairs exceeded $27 billion in the United States, against $14 billion in 1996-1997.

Preparing for a disaster is drastically different than paying for a planned kitchen makeover.

“You have to prepare, prepare, prepare. Whatever that means, to you – do it,” warned William Begal, an independent consultant based in the Washington, D.C. area who ran a renovation company for 18 years.

PAYING THE PRICE

The Parkers now know all of this first hand. When their house in the Linkwood neighborhood flooded, there were some things they needed to do right away, yet they are still spending two years later.

The presence of water means you have to move fast. They had to rip out carpet and drywall themselves, and then hire a crew out-of-pocket before any insurance adjustor came around.

They also could not live in their house while it was being fixed, so they forked out $3,000 a month for a rental.

Once the insurance kicked in, they received a small sum from an escrow account a few weeks after the flood, and then had to wait for the project to be 50% complete before they got more. They did not get the final payment until the project was done.

“It was key we had stashed away an emergency fund so we were not spiraling downward,” said Angie Parker, 38, who is a personal fitness trainer in the Houston area.

Parker said she spent many hours on the phone with the insurance company, crying sometimes, being aggressive when she had to be.

Luckily, the family had flood insurance, which was a requirement for their mortgage in a flood-prone neighborhood.

Most people, however, do not have flood insurance, and this further delays rebuilding efforts.

Yet, there were still issues. An inadvertently checked box on a form meant the contents of their house were not covered. So they were out more than $100,000 for furniture, clothing and housewares, and lost all their appeals to have those covered.  

Jerry Linebaugh, an investment advisor representative who owns JLine Financial near Baton Rouge, Louisiana, had a similar experience when his office flooded after a rain event in 2018 that was not even a named storm – just heavy rain over three days.

“You have to have a cash reserve, you have to have your insurance in line, you have to do disaster drills,” said Linebaugh, who had planned for the worst ever since Hurricane Katrina hit nearby.

Linebaugh had a system set up to transfer his office lines to cell phones and keep his operations going from hotel rooms and his employees’ homes.

He had six months of operating expenses to float his business. And he needed all it, because he did not have flood insurance.

It was four months before Linebaugh won an appeal with his business insurance policy to cover losses based on an inland marine clause, which worked for him because the damage started with water coming in through a bathroom drain.

“Probably thousands of people didn’t get that claim check because they didn’t know about that,” said Linebaugh.

(Editing by Lauren Young and Bernadette Baum)

Forest fire insurance costs soar

FILE PHOTO: A group of U.S. Forest Service firefighters monitor a back fire while battling to save homes at the Camp Fire in Paradise, California, U.S. November 8, 2018. REUTERS/Stephen Lam/File Photo

MUNICH (Reuters) – Forest fires are becoming increasingly likely because of climate change and cost insurers more than ever, with the deadly fire that ravaged northern California the single most expensive natural disaster in 2018, Munich Re said on Tuesday.

The California wildfire that devastated the small town of Paradise in November caused losses of $16.5 billion, of which $12.5 billion were insured, according to the reinsurer’s annual catastrophe report.

Worldwide natural disasters caused $160 billion in economic damage in 2018. That was down from $350 billion the previous year, but a number of devastating hurricanes had contributed to the high losses in 2017.

Insurers and reinsurers paid out $80 billion for natural disaster claims last year, down from $140 billion a year earlier but almost double the 30-year average of $41 billion, the reinsurer said.

Munich Re board member Torsten Jeworrek said that 2018 was marked by several severe natural disasters with high insured losses.

“These include the unusual coincidence of severe cyclones in the U.S. and Japan, and devastating forest fires in California,” he said, adding that climate change appears to be making such large fires more common.

Insurers spent $18 billion on two huge fires in the United States in 2018 – equivalent to one in every four dollars they paid out as a result of natural disasters.

Ernst Rauch, the reinsurer’s chief climatologist, told Reuters that forest fires were entering a whole new dimension, costing tens of billions of dollars.

“Higher and higher temperatures are leading to ever greater droughts, and high humidity in the winter means that shrubbery grows quickly, creating an easily flammable material in dry summers,” he said.

Rauch said it was questionable whether areas at high risk could continue to be populated without taking additional measures, such as building houses further from forests and with better safety standards.

In Europe, an unusually hot summer caused a drought that wrought considerable damage on the agricultural sector and was the continent’s most expensive natural disaster at $3.9 billion. However, only a fraction of those losses were insured.

Reinsurers act as a financial backstop to insurance companies, paying a chunk of the big claims for storms or earthquakes in exchange for part of the policy premiums.

Hurricanes and typhoons caused $56 billion of damage last year. Hurricane Michael, which wrought devastation in Florida, was the most expensive for insurers, causing losses of $10 billion.

The review gave no claims figures for Munich Re itself. The reinsurer is due to report fourth-quarter results on Feb. 6.

(Reporting by Alexander Huebner; Writing by Caroline Copley; Editing by David Goodman)

As California fires blaze, homeowners fear losing insurance

Local residents react as numerous homes burn on a hillside during a wind driven wildfire in Ventura. REUTERS/Mike Blake

By Suzanne Barlyn

(Reuters) – California homeowners and regulators have a new fear about wildfires ravaging the state: that insurers will drop coverage.

Massive, out-of-season fires in northern and southern California are causing billions of dollars in claims and challenging expectations of when and where to expect blazes. State law gives insurers more leeway to drop coverage than to raise rates, and some are taking the opportunity, concerning California Insurance Commissioner Dave Jones.

Homes in the Sierra Nevada foothills were dropped after wildfires swept through the region in recent years, and some other Northern California homes also have been cut from rosters, Jones said.

“We may see more of it,” he added in an interview. Insurers must renew fire victims’ policies once, but after that homeowners could be driven to unusual, expensive policies.

Retired firefighter Dan Nichols of Oroville, California was surprised when Liberty Mutual dropped his coverage this year, following a wildfire in the region.

“I was shocked and angry,” said Nichols, 70, by email.

Liberty Mutual must “responsibly manage” its overall exposure to California’s wildfires as part of a strategy to safeguard its ability to pay homeowners’ claims, a spokesman said. The insurer still issues policies in California and its strategy is not in response to recent fires, he said.

Nichols found a better deal through AAA, but others are not as lucky. In San Andreas, a community northeast of San Francisco, homeowners typically use specialty insurers, known as “surplus lines carriers,” for policies that cost about 20 to 40 percent more than a mainstream insurer, said Fred Gerard, who owns an insurance agency in the area.

Insurers must be cautious by not covering too many homes in one area, said Janet Ruiz, a spokeswoman for the industry’s Insurance Information Institute. “They tend to spread their risk so they can pay claims,” Ruiz said.

COMPUTER MODELS

Drier weather and higher variability of weather patterns often seen as effects of climate change have led insurers to turn to new computer models that provide house-by-house predictions of risk, using factors such as local topography and brush cover, a change from past practices that were based on a region’s history of blazes.

“Relying solely on company history leaves many (insurers) exposed,” said Matt Nielsen, Senior Director, Global Governmental and Regulatory Affairs at modeler RMS. A new wave of models coming out next year will “revolutionize the way insurers understand and manage risk for wildfires,” he said.

“You can’t control mother nature, but you can identify her target zones,” wrote rival Verisk Analytics Inc in a brochure for its FireLine model.

Jones said the state was reviewing the new models, partly in light of drier weather conditions, more frequent, unpredictable and severe fires, and climate change.

A California poll by consumer advocacy group United Policyholders found that computer scoring was a reason for a significant number of policy cancellations in the last few years.

United Policyholders Executive Director Amy Bach said that the differences in scores generated by various models raised questions about their accuracy.

“We want to make sure it’s a fair system,” Bach said.

(Reporting by Suzanne Barlyn; Editing by Peter Henderson and James Dalgleish)

White House plans to seek another $45 billion in U.S. hurricane aid

White House plans to seek another $45 billion in U.S. hurricane aid

By David Shepardson

WASHINGTON (Reuters) – The White House plans to ask the U.S. Congress on Friday for about $45 billion in additional aid for disaster relief to cover damage from hurricanes that struck Puerto Rico, Texas and Florida and other disaster damage, a congressional aide said on late Thursday.

The request would be significantly short of what some government officials say is needed.

Puerto Rico Governor Ricardo Rossello on Monday requested $94.4 billion from Congress to rebuild the island’s infrastructure, housing, schools and hospitals devastated by Hurricane Maria. The state of Texas earlier this month submitted a request for $61 billion in federal aid.

Last month, Congress approved $36.5 billion in emergency relief for Puerto Rico and other areas hit by recent disasters and said it planned to seek another round of funding after it reviewed requests from federal agencies and state and U.S. commonwealth governments.

Puerto Rico sought $31.1 billion for housing, followed by $17.8 billion to rebuild and make more resilient the power grid.

Senator John Cornyn, a Texas Republican, said late Thursday at a congressional hearing his staff had been briefed on the White House that would be released on Friday that he called “wholly inadequate” but he did not disclose the precise amount.

He said the White House had also “short-changed” funding for wildfires that have struck the western United States. The October disaster assistance bill included $576.5 million for wildfire-fighting efforts.

The White House did not immediately respond to a request for comment late Thursday.

(Reporting by David Shepardson; Editing by Sandra Maler)

Business group pushes for U.S. flood insurance reform as December deadline looms

Business group pushes for U.S. flood insurance reform as December deadline looms

By Ginger Gibson

WASHINGTON (Reuters) – The latest attempt to overhaul the U.S. federal flood insurance program hit a stumbling block, but a coalition of business and environmental groups renewed their push on Wednesday for lawmakers to enact an overhaul before the program expires on Dec. 8.

The SmarterSafer coalition sent a letter to members of the U.S. House urging passage of the compromise legislation that would extend to 2022 the federal program that has been heavily utilized after vast flooding from hurricanes Harvey and Irma.

“This legislative package moves the flood program in the right direction and contains needed reforms that will better protect those in harm’s way, the environment, and taxpayers,” the letter states, according to a copy seen by Reuters.

The hurdle came with the House Rules Committee indefinitely postponed a hearing on the bill that was scheduled for Tuesday night.

“Clearly they’re trying to make sure they’ve got all their ducks in a row and they’ve got all the votes they need,” said Steve Ellis, with the conservative group Taxpayers for Common Sense, which is part of a coalition pushing for reform of the program.

Joshua Saks, the legislative director of the National Wildlife Federation, said one of the shortcomings of the compromise is that it does not ensure that the money for flood mitigation projects will ever be spent.

“We need an Apollo project of mitigation right now, we need billions right now up front,” Saks said, referring to the project that put a man on the moon.

Two prominent Republican members of the U.S. House announced last week they had struck a deal that would extend the life of the program that covers most of the nation’s flood-prone properties.

House Majority Whip Steve Scalise of Louisiana and House Financial Services Committee Chairman Jeb Hensarling of Texas brokered the compromise and said the deal helps policy holders and taxpayers.

Last month, President Donald Trump signed a $36.5 billion disaster relief bill, including $16 billion in forgiveness of some debt in the National Flood Insurance Program, which insures about 5 million homes and businesses.

(Reporting by Ginger Gibson. Additional reporting by David Shepardson.)

Insured losses from deadly California wildfires could hit $3 billion

Insured losses from deadly California wildfires could hit $3 billion

By Keith Coffman

(Reuters) – Insured property losses from wildfires that raged through Northern California wine country this month, killing at least 42 people and destroying thousands of businesses and homes, could total $2 billion to $3 billion, a risk-modeling firm said on Thursday.

The analysis by Boston-based AOR Worldwide, encompassing anticipated claims for destroyed residences, automobiles, commercial properties and other economic losses, is at least double a preliminary tally estimated last week by the California Department of Insurance.

The AOR report said losses would be dominated by devastation in residential areas, especially in Sonoma County, where entire neighborhood blocks were reduced to ashes.

Since erupting on Oct. 8, the wind-driven wildfires have consumed some 245,000 acres across several California counties north of the San Francisco Bay area, leaving at least 8,700 structures destroyed.

Most of the property loss was concentrated in California’s celebrated wine country, including Sonoma County, the California Department of Forestry and Fire Protection, or Cal Fire, said this week.

Authorities have confirmed 42 fatalities in Sonoma and three other Northern California counties, among them a volunteer firefighter who was killed when his water-tender truck crashed. The death toll marked the greatest loss of life from a single wildfire event in the state’s history.

The $1 billion gap between the low- and high-end estimates was due to uncertainty surrounding how many claims will be filed for living expenses from residents forced to flee their homes, as well as for smoke damage and business disruptions caused by power outages, AOR Worldwide said.

Another unknown factor is the scope of damage that may have occurred during fire suppression efforts, it added.

A preliminary estimate from the California Department of Insurance a week ago put insured losses at just over $1 billion, although it said that figure would likely rise.

A spokeswoman with the department said on Thursday that the agency has not updated its figures.

The October wildfire outbreak was fueled by unseasonably high temperatures, tinder-dry conditions, and gusty winds. As of Thursday, most of the fires were near, or at, full containment, Cal Fire said.

Cooler weather forecast for the region in coming days should ease the wildfire risk, AOR said in its report, although Cal Fire urged the public exercise caution to avoid igniting further blazes as warm, dry weather lingers across parts of the state.

(Reporting by Keith Coffman in Denver; Editing by Steve Gorman and Michael Perry)

Lloyd’s of London estimates Maria claims of $900 mln, cuts Harvey, Irma estimates

Buildings damaged by Hurricane Maria are seen in Lares, Puerto Rico, October 6, 2017. REUTERS/Lucas Jackson

LONDON (Reuters) – Lloyd’s of London estimated net claims of $900 million for Hurricane Maria, which caused devastation in Puerto Rico last month, the specialist insurance market said on Monday.

Lloyd’s also revised down its net claims estimates for hurricanes Harvey and Irma, which hit the United States in recent weeks, to $3.9 billion from initial estimates of $4.5 billion.

Insurers and reinsurers are counting the costs of the three hurricanes, which together with earthquakes in Mexico and wildfires in California, are adding up to a heavy year for natural catastrophe losses.

Lloyd’s said it had already paid $900 million in claims for the three hurricanes.

“We are experiencing one of the most active hurricane seasons this century,” Jon Hancock, Lloyd’s performance management director said.

“While it is clear that these catastrophes will bear a heavy toll, the claims are spread across the entire Lloyd’s market, which has total net financial resources of 28 billion pounds ($36.92 billion).”

Hancock said that while Lloyd’s was cutting its earlier estimates for Harvey and Irma, “this is a developing situation and there continues to be a high degree of uncertainty around any claims estimate”.

 

 

(Reporting by Carolyn Cohn; editing by Maiya Keidan)

 

Merck cyber attack may cost insurers $275 million: Verisk’s PCS

Merck cyber attack may cost insurers $275 million: Verisk's PCS

NEW YORK (Reuters) – Insurers could pay $275 million to cover the insured portion of drugmaker Merck & Co’s loss from a cyber attack in June, according to a forecast by Verisk Analytics Inc’s Property Claim Services (PCS) unit.

Merck, however, has not disclosed the magnitude of its uninsured losses from the “NotPetya” attack, which disrupted production of some Merck medicines and vaccines.

The company was among dozens of firms worldwide hit in the June 27 attack, which began in Ukraine, then rapidly spread through corporate networks of multinationals with operations or suppliers in Eastern Europe.

“Merck has not yet fully quantified its losses, much less given any of its insurers an estimate of the total amount of those losses,” Merck spokeswoman Claire Gillespie said in a statement.

She reiterated that Merck has insurance that would cover some costs, but declined to elaborate or say how much Merck expects to have to pay on its own.

The drugmaker said in July that it had suffered a worldwide disruption of its operations as a result of the malware. It was still in the process of restoring its manufacturing operations a month later.

Merck said then that it was confident it would be able to maintain a continuous supply of its top-selling and life-saving drugs, but warned of temporary delays in delivering some other products.

NotPetya is a destructive virus that spread quickly across computer networks, crippling computers by encrypting hard drives so that machines cannot run. The attacks caused massive disruptions to industrial networks that rely on computers because businesses must individually replace damaged drives, a labor-intensive process.

Cyber insurance can be expensive to buy and is not widely used outside the United States, with one insurer previously describing the cost as $100,000 for $10 million in data breach insurance.

Policies typically cover expenses stemming from a data breach, such as forensics and data restoration, among other costs. Coverage also helps pay for business interruption expenses when a breach or malware attack shuts down a company’s website.

Some companies without cyber insurance have used their policies covering kidnap, ransom and extortion to recoup losses caused by ransomware viruses.

PCS provides estimates on a wide variety of insured losses, ranging from damages caused by hacks to hurricanes and wildfires.

(Reporting by Michael Erman in New York and Noor Zainab Hussain in Bengaluru, additional reporting by Suzanne Barlyn; editing by Jim Finkle and G Crosse)

California Dept of Insurance estimates wildfires losses at $1.05 billion

California Dept of Insurance estimates wildfires losses at $1.05 billion

By Suzanne Barlyn and Sangameswaran S

(Reuters) – The California Department of Insurance said on Thursday its preliminary estimate for insured wildfire losses was $1.05 billion, based on claims received by the state’s eight largest insurers, adding that it expected the numbers to rise.

Insurers have received 601 claims for commercial property losses, 4,177 claims for partial residential losses and 3,000 claims for auto losses, said California Insurance Commissioner Dave Jones during a media call.

Since erupting on Oct. 8 and 9, the blazes in parts of Northern California have blackened more than 245,000 acres, (86,200 hectares) and destroyed an estimated 6,900 structures as of Thursday, including homes, wineries and other commercial buildings.

More than 15,000 people remain displaced, the California Department of Forestry and Fire Protection, said on Thursday.

A fire that started Monday in the Santa Cruz Mountains now threatens 300 homes, Jones said.

Residents of Northern California’s wine country left homeless by the state’s deadliest-ever wildfires could be temporarily housed in federal government trailers, officials said on Wednesday, as the death toll from the blazes rose to 42.

Moody’s Investor Service estimated insured losses at $4.6 billion on Monday, based on an earlier figure of 5,700 destroyed structures, according to a report.

Insurer Travelers Cos Inc <TRV.N>, which announced its third quarter results on Thursday, also warned investors of large claims likely this quarter from the wildfires.

The company paused a share repurchase plan in September to conserve cash as it reviewed claims from Hurricanes Harvey and Irma, which made landfall in September and October, and it is still evaluating that position in the light of wildfire claims, said Travelers Chief Executive Alan Schnitzer on a conference call with analysts.

State Farm is California’s largest homeowners insurer and sixth-largest commercial fire insurer, according to a Moody’s analysis.

The insurer, as of Thursday, received 3,220 homeowners insurance claims and 1,110 auto insurance claims, mostly from damage sustained in Napa and Sonoma Counties, a spokesman said.

Other large insurers in California include Farmers Insurance, CSAA Insurance Group, Travelers and Allstate Corp <ALL.N> and Chubb Ltd. <CB.N>.

(Reporting by Sangameswaran S in Bengaluru and Suzanne Barlyn in New York; Editing by Shounak Dasgupta and David Gregorio)