By Wally Kennedy
Like other survivors of the May 22 tornado, Teresa Newton rode out the storm in the closet of her house. When she emerged, she found the closet was about the only thing left at 2219 Wisconsin Ave.
A firefighter by trade, Newton instinctively knew what she had to do.
“She did search and rescue in Joplin in the hours after the tornado,’’ said her mother, Jan Finney, of Joplin. “She worked here for 12 to 16 hours a day for two weeks. That’s all she did for two weeks.’’
Finney, knowing her daughter would be unable to take care of her own affairs because she was helping with search and rescue, reported her daughter’s loss to the insurance company, Missouri Farm Bureau.
Said Finney: “She was out helping other people when she was a victim herself.’’
It would be the beginning of a second storm for Newton that has lasted nearly a year and is still unresolved.
Newton was paid $103,500 by the insurance company for her house, a claim she settled on, but she believes she should receive more than $77,000 for her contents. She has been battling Missouri Farm Bureau over her contents since the tornado.
“They have paid $61,607 for the contents. They still owe me $16,017. I want the rest of my money,’’ Newton said. “I want what I was paying for. I had them for 11 years. I did my part.’’
Newton has lodged a complaint against her insurance company with the Missouri Insurance Commission, contacted the Missouri Attorney General’s office for guidance, and last fall even hired an attorney to help her with her dispute, although she has not filed a lawsuit.
In a desperate move to help her daughter, Finney recently attended a dinner of Missouri Farm Bureau officials and managed to personally hand to a company vice president an envelope containing copies of records and letters that pertained to her daughter’s claim. Finney said she has not received a response.
Estil Fretwell, director of public affairs for the Missouri Farm Bureau, said they have five cases related to the Joplin tornado that remain unresolved. The company had about 470 claims in Jasper and Newton counties stemming from the May 22 storm.
“I really can’t comment on any case that is pending or talk about the specifics of a problem,’’ he said. “We have tried to bend over backward to get these Joplin tornado claims settled, but sometimes there is a disagreement and it takes a little longer to get those resolved.’’
‘It pays to Complain’
So far, Missouri Farm Bureau has had 15 “complaints/inquiries” filed against it with the Missouri Insurance Commission by consumers impacted by the May 22 tornado.
Other insurance companies doing business in the state have had more “complaints/inquiries” filed against them in connection with the Joplin tornado, but some of those companies may have greater market share in Joplin than does Missouri Farm Bureau, according to Travis Ford, spokesman for the Missouri Department of Insurance, Financial Institutions and Professional Registration.
State Farm, for example, is the largest insurance company in Missouri and has about one-fourth of the market in the state; Missouri Farm Bureau is seventh largest, with three percent of the market. State Farm had 21 “complaints/inquiries” compared to Missouri Farm Bureau’s 15.
According to Ford, the Missouri Department of Insurance does not track information allowing for a determination of the ratio of complaints per customer, which would enable consumers to make comparisons across companies.
There were about 1,000 “complaints/inquiries” filed with the state after the May 22 tornado, out of 19,514 claims for everything from roof damage to destroyed vehicles, he said.
The department doesn’t differentiate between actual complaints and mere inquiries, which also makes it difficult to compare companies.
Said Ford: “It may just be that a consumer mentioned an issue with a specific company. They could just be questions about coverage or who their agent is.’’
Newton said she tried to make sure the complaint she filed against Missouri Farm Bureau was duly noted as a “complaint” and not an “inquiry” when she lodged it in November. She said she followed up with a call in March.
“The woman I talked to with Missouri Insurance Commission described my complaint as an information (inquiry),’’ she said. “That’s not what I filed with the commission. It was a ‘complaint’ and I wanted it filed that way.
“It was almost like they were protecting the insurance company or that the problem was my fault,” Newton said.
Ford, however, said complaints are important to the department, and it has worked with consumers to resolve disputes.
“To register a complaint with us, they simply need to fill out a complaint form. They can do that at insurance.mo.gov, with the option to submit online, or download a PDF form and mail or fax it in,’’ he said. “We strongly encourage consumers to file ‘complaints’ if they have reached an impasse with their insurance company.’’
Ford said that consumers who filed “complaints” with the department in 2011 received an additional $19 million in payments from their insurance companies, and May 22 tornado victims who filed “complaints” have so far received an additional $4.5 million in settlements, which is about three-tenths of 1 percent of the $1.47 billion that insurance companies have paid out because of the storm.
Said Ford: “Let’s say a consumer files a complaint that his insurance company has only offered him $100,000 for his homeowner’s claim. We determine that under the policy, the company actually owes $150,000 — that would count as a $50,000 recovery for the consumer.
“It pays to complain. When in doubt, complain,’’ said Ford. “That’s what we want people to always know.’’
Newton wasn’t content to file a complaint with the state regulatory agency, however. She also contacted the Missouri Attorney General’s office and followed up on its advice and hired a lawyer.
Ford said there is no way of knowing how many consumers in the Joplin market have turned to attorneys to represent them in disputes with insurance companies. It’s not something the department tracks.
“The consumer is always free to hire a lawyer,’’ said Ford. “Sometimes you need a lawyer to resolve factual disputes.’’
Katrina Richards, with the Hershewe Law Firm of Joplin, said they have experienced an uptick in clients seeking legal guidance in how to deal with insurance companies.
“What we have seen is that several insurance companies have done a good job of paying their claims right off the bat,’’ she said. “But a few of them are dragging their feet. These are cases that remain unresolved 11 months after the tornado.
“A consumer has a right to fair and reasonable payments from these companies,’’ she said. “There are laws in place that require insurance companies to pay their claims within a reasonable time frame after the loss. They can pay a penalty if they are not being fair.’’
Richards, who does not represent Newton, said some companies are more willing to settle than others when an attorney becomes involved.
Newton claims her effort to recover her personal property loss bogged down early on when she could not get the adjuster to return phone calls. Her agent, she said, never did call her.
“Then I found out my agent was no longer my agent,’’ she said. “There was this new guy — I had no idea that I had been switched to a new agent — he told me to go through every room and itemize every loss.’’
For 11 years preceding the storm, Newton said she has paid the premiums on her policy for the contents of her house, all the time with the understanding that she had “replacement cost’’ coverage and not “cash value’’ coverage.
Cash value policies typically deduct depreciation from personal property as part of the settlement, and that can result in less than it will take to replace damaged property. But with replacement cost coverage, the insurance company often pays the cost to repair or replace the damaged property at today’s prices without deducting for depreciation.
Newton would later learn from her attorney that the fine print of her “cash value” policy allowed for depreciation of the contents, but she isn’t sure the misunderstanding was her fault. Even if it was, she said the insurance company had an obligation to make sure she understood everything.
“Didn’t my agent and the insurance company have some responsibility to ensure that I understood the terminology of the policy and how the process would work if in the event I lost my home and everything in it due to a disaster of any kind?” she asked in an email to the Globe. “Why is it solely my fault for not understanding the policy?”
According to a follow-up report by Missouri Farm Bureau, Newton said she had about $97,000 in contents, but only $77,625 in insurance coverage, so she was underinsured by $20,000.
She listed as many items as she could recall to recover as much of the $77,625 in maximum coverage that she could. She had a $500 deductible but some items were depreciated by as much as 50 percent, and initially she thought she would only walk away with as little as $48,000 to re-buy furniture, appliances and rebuild her life.
“They depreciated things like cash ... how does cash depreciate?’’ Newton asked.
Elements of her claim and reports about it kept changing, she said, and her frustration has been aggravated by the fact that she has found it impossible to identify the people with Missouri Farm Bureau who made the changes and hold them accountable for their decisions.
“I jump through all of the hoops and then they refuse to give me in writing copies of the changes that are made. They have put misinformation on claims and refused to correct it. I keep asking: ‘What exactly are you wanting us to do?’”
Newton sought guidance from her insurance company, but at times said she felt the person to whom she was talking had no clue about what had happened in Joplin.
When it was suggested to her that she use receipts to establish what she had owned, Newton said, “My house was hit by a tornado. How would I have receipts left? What part of ‘a tornado hit my house,’ do you not understand? I have nothing left.’’
Newton said she was told by the insurance commission that all of the insurance companies with tornado exposure in Joplin were requiring policy holders to itemize losses.
“That’s totally not true. I have talked to lots of people who were cut a check for their contents with no questions asked,’’ she said. “They were not asked to itemize because they had lost everything. My claim was a total loss until they backtracked on us.’’
Newton recently received a letter from the insurance commission confirming her claim that some insurance companies cut checks for loss of contents without requiring itemization after the May 22 tornado. The letter states Missouri Farm Bureau was not one of those companies.
The letter states: “Missouri laws do not address this matter, therefore, your policy provisions govern.’’
While she is attempting to resolve the remaining $16,017 loss, her insurance company spent $20 million to purchase three insurance companies operated by Barton County Mutual Group. Claims associated with the Joplin tornado caused the three small insurance companies to become insolvent.
The three Barton Mutual companies had 41,000 customers and premium sales of $29 million in 2010, but reported claims of $48 million related to the Joplin tornado, according to the Missouri Department of Insurance.
“They purchased this company and took on $20 million in more debt,’’ she said. “I asked them how they could do that and not pay me what they owe me. The insurance commission said that is none of our concern. Well, I beg to differ.’’
Fretwell, with Missouri Farm Bureau, said there is no connection between the company’s business decision to acquire Barton Mutual and her unresolved claim against Missouri Farm Bureau.
“What I have learned from this is that the people who had a good relationship with their agent have done better than those who did not,’’ Newton said. “Another thing is to make sure the insurance company provides you with a copy of your policy before you sign it so you can make sure that it says what you think it says.
“They keep saying this is an easy process. That’s a bunch of crap,’’ she said. “There are days I want to give up, but I’m not. They owe me $16,017.’’
$2 billion in claims
As of March 31, the insurance companies with exposure in the May 22 tornado had consumer claims totaling 19,514. The companies have paid $1.47 billion.
“We still expect the paid number to top out near $2 billion,’’ said Travis Ford, spokesman for the Missouri Department of Insurance, making it the single largest insurance loss in Missouri history.