Lt. Gov. Osbert E. Potter, who also serves as commissioner of insurance, has issued an emergency order to all property and casualty insurance companies that are licensed and authorized to conduct business in the U.S. Virgin Islands.
According to Potter, “The order, which is effective immediately and dated Feb. 12, 2018, requires insurance companies to conduct a second review of each Hurricane Irma and Hurricane Maria-related claim for which a determination of ‘underinsurance’ was made.”
As announced by Division Director Gwendolyn Hall Brady during the lieutenant governor’s Jan. 30th press conference, the order was generated as a direct result of numerous underinsured-related complaints that homeowner’s insurance policyholders filed with the Division of Banking, Insurance and Financial Regulation after the two hurricanes.
Underinsured means the amount of homeowner’s insurance held on the property is insufficient to cover the total dollar amount of losses to the property. Generally, “underinsured” is associated with the policyholder’s failure to coinsure no less than 80 percent of the property’s value.
The Emergency Order mandates:
The insured must be notified of the insurer’s finding in writing within three weeks after the second review is completed;
Every Property and Casualty Insurance Company that is licensed and authorized by the commissioner of insurance to conduct insurance business in the territory is required to provide to its homeowner policyholders a full explanation of the term “underinsured;” and each policyholder must sign a document evidencing that the agent has provided a full explanation of the term “underinsured” and how the conditions will affect the policyholder’s ability to receive the full benefits of insurance coverage in order to restore the insured property in the event of a catastrophe or any loss covered under their policy.
“With the issuance of this emergency order, we have placed the responsibility on all insurance companies within the territory to properly notify and educate their policyholders on the issue of “underinsurance.”
Once educated about underinsurance, the policyholder can then make an informed decision as to what will be covered under the policy and will, therefore, have a full understanding of the impact of the decision to purchase a policy that does not offer full coverage of said property. This emergency order is in the best interest of protecting our consumers.” said Potter.
The division has also drafted a brochure on “How to Avoid Being Underinsured,” which will be distributed to all licensed property and casualty insurance companies, licensed insurance agencies and local banks, in an effort to inform the public about the risks of underinsurance.
Homeowner’s insurance policyholders should contact their insurance agent and company for more information on their insurance coverage. Consumers may also contact the Division of Banking, Insurance and Financial Regulation on St. Thomas at 774-7166 or on St. Croix at 773-6459, or visit the division’s website at www.ltg.vi.gov for more information on banking, insurance and financial regulation services.