STEVE INSKEEP, HOST:
The images of devastation from Hurricane Ian include many boats that floated inland and smashed into houses. Think of those images for a moment. Think of the value of the boats, and then think of the value of the houses. And now consider the scale of the insurance claims. How do companies pay out, and what can uninsured people do? We've called an actuary who analyzes and measures financial risk. Rich Gibson, senior casualty fellow at the American Academy of Actuaries, welcome.
RICH GIBSON: Thank you, Steve. Appreciate you having me on.
INSKEEP: I guess when we look at those images, should we assume that insurance covers all that stuff?
GIBSON: So, Steve, can I take just a second to say on behalf of the American Academy that our thoughts are certainly with those on the ground in Florida and South Carolina, dealing with the aftermath of Ian? And so there's - these are going to be complex claims. First of all, homeowner's insurance - the standard homeowner's insurance policy would not cover flood. But the National Flood Insurance Program, administered by FEMA, does provide flood insurance, if you've chosen to purchase that.
INSKEEP: Would people be able to make insurance claims - I don't know - for wind damage? If the roof comes off the house, is that covered?
GIBSON: Absolutely. Yes. Absolutely. Wind damage would be covered. It's just the flood and the wind would have to be handled separately.
INSKEEP: That immediately in my mind creates a complexity about how much people would be paid and how quickly. I think Florida law insists that people get paid relatively quickly, doesn't it?
GIBSON: Most states have claims settlement provisions in their laws. I would think in terms of a catastrophe like this, there's going to be a longer time period that it takes because you've got the process of providing notice and, you know, working through the claim and that sort of thing. And there's so many claims. But insurance companies are ready to deal with catastrophes like this. And it's typical that they're going to have catastrophe teams on site in the state. In fact, I think I'm hearing from the Florida financial office that they're setting up what they call insurance islands so that the insurers are available and easily found by the...
INSKEEP: What is an insurance island? That is an office in some accessible place - someplace that's still accessible?
GIBSON: So, yeah, and I think it's in, as you say, an accessible place. And I think they're trying to get all of the insurers into one place so that the insurance customers and claimants have a place to go that they can speak to their insurers. And certainly all of the people who have damage should reach out to their insurance agent, and if not their agent, their carrier, as soon as they can. They don't have to wait to go to the islands, you know, to visit directly with the insurers. But they can certainly put in the phone calls. And I would recommend they do that.
INSKEEP: In a few seconds that we have, I just want to mention, some people get cynical about insurance companies. They will presume that the way that the industry makes money is by denying claims. Is it in the interest of the industry to pay a lot of claims in this situation?
GIBSON: So the claims are paid based on the insurance policy and the contract that is laid out there. And it's certainly in the interest to pay claims in accordance with that policy.
INSKEEP: OK. Mr. Gibson, thanks so much for your time, really appreciate it.
GIBSON: Yes, thank you.
INSKEEP: Rich Gibson is a senior casualty fellow at the American Academy of Actuaries. Transcript provided by NPR, Copyright NPR.
