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Dealing with Sandy damage? Florida pro offers advice

By Beth Pinsker Gladstone

NEW YORK (Reuters) - With people in the New York metropolitan area still suffering from the effects of Sandy, Floridians are empathetic. They've been through this and know how bad it is.

Reuters talked with Robin Westcott, an attorney and insurance watchdog who serves as Florida's insurance consumer advocate. Most states have such an advocate, and they stand ready in New York, New Jersey and other states affected by Sandy to hear complaints from consumers about their insurance. But Florida has been through it so many times that Westcott has some key advice to offer.

Q: What should people in the storm area be thinking about right now?

A: My first advice is to document, document, document. Save receipts if you do repairs and document with pictures that you are trying to mitigate further damage. Whatever you can afford to do, do it.

Q: When should the insurance company come into the picture?

A: Some of the initial contact can be made via telephone. They are probably trying to deal with overwhelming amounts of people right now. But you have to report damage. We recommend that consumers, at the very least, if they are unable to contact via telephone, for them to fax or scan information to their agent or call into a national number or website.

Q. What is a reasonable response time for an adjuster to arrive?

A: It's just going to depend. I think you still have areas where they are not letting the public in. That could cause some disruption. In a week, in a natural disaster, you should have some expectation that there should be access to an area. And then you should see somebody within a week of that.

Q: How much contact should you expect to have with your insurance agent?

A: Insurance companies should make every effort to accommodate the homeowner when accessible. Some companies will be better at that than others. Certainly they have learned some of the things that they can do to help facilitate that for consumers. Some will have mobile units that will be set up. If you go to one of those, take your information with you.

Q: If the governor of the state where a consumer lives says a hurricane deductible won't apply, does that mean it doesn't apply everywhere?

A: Every state and jurisdiction might have a different trigger for when it is a wind event and when it is a hurricane. My guess is that in many situations as a result of this storm, the hurricane deductible will not be triggered. My guess is that most states, as in Florida, will try to err on the part of the consumer.

Q: Would separate wind deductibles apply?

A: In Florida, every policy has wind covered separately. In many states, we see that as well with national carriers. But separating the wind portion of damage is difficult. It's going to come down to that old distinction of whether or not you also had flooding. There were numerous cases after Katrina in Louisiana, when individuals had policies that covered wind, but they did not cover flood. So there was going to be a denial of coverage.

Q: So what happens then?

A: Most consumers will say, I have a loss, and then the carrier, if it's clearly a flood event, will deny the claim. Even if there was clearly no flood coverage, many times, you get litigation anyway, trying to establish that the damage was a wind result. In Florida, for instance, we have wind-driven rain, and we have led the way in litigation on claims coverage. I am so sympathetic to consumers on this issue, but I also understand that it impacts individual rates - everything will go up. Plus, you can have financial instability among insurance companies. Paying out claims that a company didn't plan for, or even just fighting the cases in court, can cause insolvency or impairment in a company, and that impacts all its policy holders. This is a very fine line. You see these people you know have lost their homes, and you want somebody to pay for that. But what happens to the insurance company affects all the consumers.

Q: Do you see a solution to this problem?

A: What's really important is to start talking about how to make us less vulnerable and limit damage in the first place. Florida has the strongest building code in the nation because we have a catastrophic risk of hurricane. If it starts at the national level, we can be less prone to catastrophic events. I've been a Floridian for six generations. I look at our coastline. It's such a treasure, but we still keep putting very vulnerable structures on coastlines, and expect that we get insurance for that. And that's irreconcilable.

(Editing by Chelsea Emery, Linda Stern and Phil Berlowitz)

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