Everything the Cauthens owned was gone and they found themselves evacuated from their Slidell, La., home with nothing but a pile of clothes and a pickup truck. They were at the mercy of their insurance company to get cash for living expenses.
But Cauthen’s first check was sent to the flooded-out home from which he had just been evacuated.
“You don’t know. This was just a nightmare,” said Cauthen, 48. “You had to go through about a thousand people just to get $2,500.”
In an effort to help people like him, The Hartford Financial Services Group recently began offering special emergency claim debit cards to property-casualty customers struck by disasters. Other insurance companies are also using lessons from Katrina to find new ways to help customers cope with disaster.
The debit cards, to be distributed by claims adjusters, will allow customers to access emergency payments from any ATM in the nation. The cards can also be used at stores that accept regular debit cards. The limit is determined by an adjuster based on the amount the insurance policy allows for an emergency.
Each card will be active for a year, and if all the money has not been used, the company will cut the customer a check for the balance.
“We’re not making any money on these accounts,” said Joe Loparco, a company spokesman. “There is no float, there is no interest for us.”
Adjuster Troy Rhinehart said he hopes the program will alleviate some of the problems he saw last year in Louisiana, where customers affected by the hurricane were left with no way to access their money.
“They were getting checks from us, but they had nowhere to go with their checks,” he said. “The banks were down, or if they were in another city, that bank would hold the check for five days.”
Juan Andrade, who heads The Hartford’s property-casualty operations, said the company also offers customers the option of having emergency funds deposited directly in bank accounts.
The cards will be protected with personal identification numbers so they can’t be used if lost or stolen. Customers living with strangers in shelters won’t be forced to cash large checks and keep that money on hand.
“It’s really about ease of use,” Andrade said. “Not having to worry about, ‘How do I pay for a a hotel room if I’m out of cash and my credit cards are fully loaded?’ We do hope that at the end of the day that makes life easier for them and at the end of the day that means retention of customers here at The Hartford.”
Joseph Annotti, a spokesman for the Property Casualty Insurers Association of America, said it’s a novel idea that may catch on.
“It’s good business policy and good public relations to get out there and see the properties and get people paid quicker,” he said. “Also, the longer the process is delayed, the more likely there will be a lawsuit. And win or lose, that’s still going to cost you more money.”
In addition to changing the way claims are paid, Annotti said, property-casualty companies are trying to make sure they’re ready for disasters by spending money on two-way radio systems, mobile response trailers and programs to help speed up the settlement process.
“I think companies got an enormous wake up call after Katrina, and vowed to do what they could to change things,” he said.