Hurricane Michael destroyed their homes. Then the insurance heartache began.

PORT ST. JOE — When Michael McKenzie and Marci Brannen returned home three days after Hurricane Michael, a toppled pine tree lay across their entrance just a few blocks from the water.Branches poked through the broken roof like fingers in aluminum foil. The force had cracked their concrete-block foundation. Water stains inside the one-story reached a foot and a half high.The couple figured insurance would take care of them. Before they even knew the extent of the damage, they filed claims from her parents’ home in Georgia.Their wind insurer offered $16,000 for a new metal roof, which would also need repairs to the trusses and framework underneath. That was barely more than they had recently paid for the tin alone.They hired a public adjuster and later contacted a lawyer to bolster their claims. An independent engineer declared the house structurally unsound, so the couple paid to tear it down. CLICK HERE FOR OUR GUIDE TO HURRICANES IN FLORIDA The estimate to rebuild: as much as $400,000.Nine months after the storm, McKenzie said, they have received just about $120,000 for the building from their two insurers combined.“Neither one wants to pay what I feel like they both owe me,” he said.Across the Panhandle, from Panama City to Port St. Joe, north through Blountstown and into Marianna, residents are battling insurance companies. They complain about unanswered calls and payments that are too small or too slow. Michael launched more than 147,000 claims in Florida, according to state data, carving a long trail of ruin as the first storm to strike the United States with Category 5 force since Andrew.McKenzie is an accountant, meticulous with numbers but still struggling to navigate the process. His clients tell him they have the same problems.The couple stays on the empty lot, in a trailer that rocks whenever one of them moves. McKenzie, 43, said he’s gotten the bank to delay payments on the mortgage. Brannen, 34, wonders when she’ll live in a house again.They feel abandoned by their insurance carriers. And they can't help thinking, “Why do you pay premiums?”• • •Billboards advertise law firms and public adjusters along U.S. 98 from Port St. Joe into Mexico Beach as the disaster economy churns. Blame is a currency as much as the dollar.More than 97,000 of the insurance claims from Michael relate to residential property, another 11,000 to commercial. The state lists the majority as settled, according to the Office of Insurance Regulation. About 21,000 remain outstanding. That almost certainly undercounts the number of unsatisfied customers; residents can seek to reopen claims that insurers might initially report as closed.The post-storm quagmire pits a pair of Florida’s most powerful special interests — insurance companies and trial lawyers — against each other. Residents are caught in the middle, hoping to be made whole. HELP YOURSELF: Hurricanes, home insurance and how to make sure you’re prepared In McKenzie and Brannen’s case, they paid about $2,600 in premiums each year between their flood carrier, Tower Hill, and wind insurer, Gulfstream. They viewed that as a promise they would be covered in a disaster. Combined, they said, their policies could pay out a maximum of about $300,000.Now, they’re fighting to get close to that much.Lawyers call the insurers greedy, driven by bottom lines instead of moral centers. They track stories of clients offered just a few thousand dollars, only to receive tens or hundreds of thousands more when they use legal letterhead.“Insurance carriers are not in the business of paying out claims,” said Jeff Carter, a Panama City lawyer who lost his home to the storm. “No business ever made a profit by letting all the money go out the door.”Insurers counter that attorneys take a chunk of the money they help a client win. Public adjusters, third-party contractors who work with property owners to conduct independent damage analyses, charge up to 10 percent.“I’m puzzled why lawyers who say they have their consumers’ best interest at heart encourage people to file a claim that 33 cents of every dollar goes in that lawyer’s pocket,” said Lisa Miller, a consultant to carriers and former Florida deputy insurance commissioner. READ MORE STORIES ABOUT HURRICANE MICHAEL Individual cases drag on for months. More than a year after Hurricane Irma spun through Florida, about 76,000 of a million insurance claims remained open.Sen. Jeff Brandes, a St. Petersburg Republican and member of the banking and insurance committee, said residents can seek appraisals and mediation to sort out disputed claims. He advised people to learn about their policies and the claims process, so they view insurance "as a partnership before it’s confrontational, before the storm.”It’s difficult to get a true sense of the gap between what people feel they are owed and what they have been paid. Florida estimates Hurricane Michael caused $6.6 billion in insured damages and so far insurers report paying $5.6 billion for claims. Some companies mark their detailed filings “trade secrets,” muddying the picture of which insurers have the most open claims and where the remaining billion dollars might come from.Attorneys soon expect some Hurricane Michael disputes to escalate into civil lawsuits for breach of contract.Such cases are sometimes signaled by Civil Remedy Notices filed with the state, which put carriers on the clock to respond to demands for fair payment. More than 900 have been filed after Michael.Carter, the Panama City lawyer, said some in the Panhandle are reluctant to go to court, leaning on generational independence and a belief that parties will hold up their ends of a contract.“They’re just wringing their hands,” he said, “waiting for the carriers to do the right thing."• • •Here’s how insurance typically works after a hurricane:Residents with coverage file claims, possibly for the first time, through policies they’ve never read, to company representatives with whom they’ve never spoken. Field adjusters examine properties, then input what they see into a program that computes damage and rebuilding costs. Some insurers kick those reports back to the office, where a desk adjuster reviews the analysis, and the carrier decides what to pay.The process seems clear and specific, but critics say neighbors endure drastically different experiences after a storm, based on subjective reasoning. The quality of a single field adjuster can affect a claim. After Michael, lawyers said, adjusters who never worked in a major hurricane misunderstood damage or conducted incomplete assessments.“The policyholder bought a promise that if something happened, they were going to be taken care of,” said Ron Delo, a longtime public adjuster. “They didn’t buy a spot at the slot machine.”Several insurance companies declined or did not respond to requests for comment for this story.Delo said he has heard of field adjusters having their valuations reduced by desk adjusters who make recommendations without even visiting a property.He gave a quick hypothetical: Water damages the walls of a home, which now must be discarded. The process of removing drywall damaged by fresh water is different than that damaged by contaminated saltwater. The price of removal could rise from 35 cents to $1.35 per square foot — but how much money a resident gets hinges on how the adjuster inputs data.Multiply that by thousands of square feet.• • •Jim Nunneley figured out right away that he couldn’t handle his claims on his own.The 69-year-old Cape San Blas resident had four policies to balance, for his home and his restaurant, Joe Mama’s Wood Fired Pizza. He’d gotten 6 feet of water on the lower floor of his house, situated on a strip of land stuck into a bay, and another 4 or 5 inches inside the Port St. Joe pizza shop, which damaged the sheetrock.Nunneley hired a public adjuster.“Without them, you’re just one little guy trying to fight with Lloyd’s of London,” he said, referring to the behemoth overseas insurance market, which holds his residential flood policy.The surge of water lifted his pool table, laundry machines, yard equipment and woodworking tools. It deposited a riding lawn mower on top of a tipped-over golf cart.When the flood adjuster first walked through, Nunneley recalled, he began listing off everything Lloyd’s would not cover.More than half a year after the hurricane, he is still negotiating with his wind carrier, too — Velocity Risk Underwriters.“They sent out 4 to 5 different people to look at the roof,” Nunneley said. “And none of them even brought a ladder.”The providers stopped communicating with him directly after he brought in the adjuster, he said. He had paid $3,000 a year for his personal flood insurance, and another $1,500 for wind at his home, but he never read the details of his policies. Now the insurers were quoting the fine print in deciding payments. His adjuster told him it would take a year to settle the claims.“We have a beautiful view of the bay, the same bay that ended up in my basement,” Nunneley said. “It’s kind of the price you pay.”If another hurricane comes, he expects to have the same flood insurer, the only one he knows offering coverage on his narrow shoreline.“We’ll be partners for life,” Nunneley said.• • •The byzantine insurance system, according to critics, is set up in a fashion that allows flood and wind carriers to try to shift accountability.Flood adjusters say wind caused damage; wind adjusters say floodwater is to blame.The problem is unavoidable when almost all flood insurance is handled by the federal National Flood Insurance Program while wind insurance comes from companies regulated by the state. It’s rare for a single carrier to cover everything.“You buy both, and you have a loss, and it’s unclear which one caused it — you’re going to end up in a situation ... where you may need to get your own legal representation,” said Charles Nyce, a risk management and insurance professor at Florida State University.Chip Merlin, a Tampa insurance lawyer, said the same conflict happened in the last 15 years after Hurricane Katrina and Hurricane Ike. He said companies try to avoid making payment even when a slab is all that’s left of a property, as is the case in much of Mexico Beach.“Typically you have the strongest wind speeds come first, and then the storm surge follows it,” Merlin said. Both cause damage. But residents and their attorneys, he said, may need to pay meteorologists and engineers to prove that flood and wind are to blame, and how much.Florida has a principle called the Valued Policy Law to make the process simpler when residents suffer a total loss. If the damage comes from a problem covered by an insurance policy, it says, the homeowner should receive a full payout of what they need to rebuild. What’s trickier is if the loss is the result of both a covered and uncovered problem — as would be the case in a flood and wind scenario with two separate insurance policies. The law states that people should still be paid if either single issue, in this case flood or wind, could have completely destroyed a property alone.“The carriers are just completely ignoring that,” said Amy Boggs, a St. Petersburg lawyer working insurance cases in the Panhandle. She said providers hope residents will move on from claims if they’re unaware of legal options.Another complication: Many national flood policies are governed by federal law instead of the state.Matt Landau, a Boca Raton attorney also working around the Panhandle, said he believes insurers make a simple calculation: “If there’s 10 claims, and four of them go away because (people) just accepted their nominal offer, then they’ve won.”• • •Bill Champion and his wife called their vacation retreat “Lauren’s Place,” for his daughter. It was one section of a triplex in Mexico Beach.Champion, 61, said he began visiting the town as a toddler. He later taught Lauren to fish there, then showed his granddaughters how to ride the waves.A tennis instructor, Champion said he saved for a house on the shore, and this was one of the only spots he could afford. He paid about $75,000 more than two decades ago.The property was just a couple hundred yards from the water. Champion took out both flood and wind insurance, and he said he never missed a payment.After the storm, he said, all they had left was a slab. His flood carrier paid about $135,000, enough for Champion to start thinking about rebuilding. A representative from Frontline, the wind insurer, called and asked for his address in November to send his checks.But Champion said the money did not come. Weeks passed, and he could not get anyone at Frontline to take his call. Finally, as the initial 90-day period for an insurance company to make a payment or denial neared, Champion got about $12,000 for the building, contents and loss of rental income.“Ninety percent of the buildings are gone and then you’re dealing with this insurance company that won’t even respond to you, and then when they do respond to you, it’s a joke,” Champion said.He called Boggs, the St. Petersburg lawyer who he had seen posting advice in a Facebook group for people with insurance questions after Michael. And he reached out to his neighbor, with whom he shared a wall, to find out how much Frontline paid for a claim on a policy Champion believed was very similar to his own. He learned that after a lawyer got involved, the neighbor’s wind payment reached more than $285,000, more than 20 times what Frontline offered Champion.They had different adjusters, but Champion was stunned.Eventually, he went to mediation in Tampa with his wife, Boggs and the Frontline representatives.Following about five hours of negotiation, Champion said, he and his wife walked away with $225,000, not including the money that went to Boggs.Champion said he spoke for maybe 20 minutes at the mediation session, feeling a competitive burn, like it was a tennis match.Why was I treated so rudely? he asked. And: Why did my neighbor get paid and I didn’t?But the Frontline representatives did not give Champion the answers he wanted.“They never apologized,” he said. “They said it appeared that I was frustrated.”• • •

Hurricane Michael destroyed their homes. Then the insurance heartache began.

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