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Thousands of Puerto Ricans have been forced to dump their savings, close their businesses or resign themselves to structural damage as they fought insurance companies for millions of dollars in unanswered claims more from one year after Hurricane Maria.
Experts say the Category 4 storm surprised insurance companies and left them financially upset after being hit by nearly 279,000 claims, a figure an expert described as extraordinary. A major insurer has already sold, leaving over 1,500 claims worth $ 70 million. Many fear that other companies will follow.
"The industry has never been faced with such an astronomical number of claims," said Iraelia Pernas, executive director of the Puerto Rico Insurance Companies Association. "Nobody was prepared for that, neither the federal government nor the insurance companies, no one."
The Puerto Rico Insurance Commission has already fined more than $ 2.4 million to at least seven companies for delay in settling claims and paying claims. All companies in the US had bought reinsurance, but that was not enough for some.
Commissioner Javier Rivera said it was too early to say what would happen to Real Legacy, the company that closed down. But he thinks the other company that has exceeded its reinsurance limits, Triple-S, has enough capital to avoid a similar fate.
"There will always be a risk that some claims will not be processed," he said. "But we will do everything possible."
Michael Barry, of the New York-based nonprofit information assurance institute, said it was extremely unusual to exceed the limits set for reinsurance: "That's me. said that it was an extraordinary event: even in the worst case scenario, Hurricane Maria was hard to imagine for businesses. "
Two insurance companies in Puerto Rico are also undergoing a review whose implications are negative, said Brian O. Larte, director of the Property and Casualty Division at AM Better, a credit scoring company. insurance.
Hurricane Maria has been the most violent storm to hit Puerto Rico for nearly a century. It happened during a 12-year recession, causing more than $ 100 billion worth of damage, destroying the power grid and forcing companies to stay closed for months. Overall, Maria was the most expensive disaster for the insurance industry last year, with losses of $ 32 billion, more than hurricanes Irma and Harvey, according to a report by Swiss Re , a reinsurance company based in Switzerland.
Insurance companies in Puerto Rico paid a total of $ 4.4 billion in compensation claims, but more than 13,600 claims have not been closed, according to a report by the Puerto Rican government. The report shows that 65% of the global applications were closed with payment and 30% without payment.
The commissioner's office recently launched an audit of all companies and Rivera said he was examining some more carefully than others, although he refused to name them. His office received some 1,600 complaints, nearly three times the number of complaints received during a normal year.
Pernas, of the insurance association, said it took insurance companies two years to pay $ 1.2 billion in claims following Hurricane Georges, a category 3 hurricane that hit She also stated that Maria's pending applications were complex and involved mainly businesses, municipalities, government agencies and co-ownerships.
"They have to be examined with the utmost care because they are big," she said.
According to Barry, the number of pending claims is normal in the case of a disaster of such magnitude, but lawsuits have already been initiated.
"We are talking about companies that have disappeared," said lawyer Lee Sepulvado, who has filed a class action lawsuit. "This obviously has an impact on people's lives."
Edwin Rosario is one of those who were forced to close a business: he closed a restaurant in the coastal town of Dorado, in the northern shoreline, which he opened four years ago. The 48-year-old claimed damages in excess of half a million dollars. He only received $ 93,000 from the insurance company. He used all his savings, sold his house and transferred his daughter to a more affordable school.
In December, he should decide when he will leave Puerto Rico and join some 155,000 people who fled to the American continent after the hurricane hit.
"The process has been incredibly frustrating," Rosario said as he remembered when he had entered his restaurant and noticed the damage. "That day was one of the few times I sat down and did not stop crying."
Last month, Governor Ricardo Rossello's administration sued various insurance companies after officials said they failed to respond quickly enough to requests filed after Hurricane Maria. They said the lawsuits were aimed at preventing companies from abandoning their claims because they would have expired. The lawsuits also seek $ 2.6 billion in damages for those who have not been compensated.
"What's happening in Puerto Rico is very, very serious," said lawyer Francisco Amundaray, who represents several clients seeking a response from insurance companies. "Companies, having not been prepared for such an event, refuse to pay claims of absolute value."
Lilliana Sanchez, who owns a pharmacy in the coastal town of Salinas, in the south of the country, is still waiting for full payment. Her husband lost part of his hand trying to repair a broken generator, which is insured for $ 30,000.
Sanchez announced total losses of $ 50,000 after Maria. Since then, she has been forced to refinance her home, cancel her daughter's housing in the university, halve her staff at the pharmacy and reduce her hours of operation. She called the insurance company several times about her claim, but to no avail.
"They only tell me that the treatment is going on," she said.
Under the law, insurance companies in Puerto Rico have 90 days to settle a claim. Sanchez said that she had filed her first claim 10 days after Hurricane Maria passed on September 20.
Pernas said the companies were changing their contingency plans and hoped to rely on claims adjusters before major storms.
For now, the coastal town of Loiza, in the north of the country, is one of the municipalities affected by the delay. Nine basketball courts were destroyed, including one whose roof collapsed. A tarpaulin, which is replaced every three months, still covers part of the town hall of Loiza. The city council is now meeting in a rented house. Mayor Julia Nazario said that Maria had caused more than $ 14 million in damages, but that Real Legacy had awarded only half a million dollars on a $ 9 million claim.
"None of our facilities have been repaired," she said. "We do not have money."
