Insurance Companies Respond to Biden’s Call to Help Victims Cover Higher Costs

Insurance Companies Respond to Biden's Call to Help Victims Cover Higher Costs

WASHINGTON – Two of the largest insurers in the United States have responded to President Joe Biden’s call to cover additional living costs for policyholders in Louisiana who evacuated their homes before Hurricane Ida, but were specific. were not subject to mandatory evacuation orders.

A White House official told CNBC that Allstate and the USAA have agreed to cover additional living expenses for state policyholders who have left their homes.

More companies are expected to follow suit, said the official, who requested anonymity to discuss the ongoing efforts.

CNBC has contacted Allstate and USAA regarding the policy change. Representatives of the companies did not respond to a request for comment.

Typically, insurance policies only cover additional living expenses for policyholders who have been ordered to evacuate their homes before major storms, and not for those who choose to voluntarily leave their homes. Eh.

Biden first raised this issue on Thursday in his White House storm speech.

“Right now we are hearing reports that some insurance companies may deny coverage for additional living expenses unless the owner is subject to mandatory withdrawals,” Biden said.

Homeowners on the way to the storm, he said, “left their home because they thought it was a leak or a death threat. There is nothing voluntary about it.

Biden then called on home insurance companies, “Do whatever it takes. Pay your policyholders what you owe them and cover the cost of temporary housing in the event of a disaster. Help those in need.

The episode is a rare example of a US President effectively embarrassing large companies to change their core business – the way insurance companies measure eligibility for coverage.

The policy change dates back to former Louisiana congressman Cedric Richmond, who is a senior White House official from Biden.

In the days following the storm, Richmond heard from homeowners that their insurance policies do not cover the cost of temporary housing unless their homes have a mandatory evacuation order.

But even when Ida made landfall as a Category 4 hurricane last Sunday, evacuation orders varied considerably from parish to parish.

Some parishes on the coast, such as Grand Isle, have issued mandatory evacuations for all residents. But others issued evacuation orders that were only mandatory for people living in low-lying areas, and voluntary in areas better protected from flood waters.

In New Orleans, Mayor LaToya Cantrell issued an evacuation order that is mandatory for people living outside the city’s levy system, but voluntary for those protected by the levy.

“We are not calling for a mandatory evacuation because the weather is just not on our side,” Cantrell said Friday before the storm.

“We don’t want to put people on the streets and are therefore more at risk due to time constraints. “

Biden traveled to Louisiana on Friday to assess flood damage and meet with residents and first responders. Earlier in the week, he described a massive federal response to the storm, pledging to conserve federal resources “for as long as it takes.”

The home insurance industry’s leading professional group said its members are aware of the suffering caused by IDA and are eager to help.

“IDA has devastated communities on the Gulf Coast and the East Coast. Insurers recognize the tragedy and concerns many American families, individuals and businesses face in the form of wildfires and severe weather amid uncertainty about the pandemic. are furious, David Sampson, president and CEO of the American Property Casualty Insurance Association, said in a statement to CNBC.

“Insureds who have suffered damage should call their insurer as soon as possible to begin the claims process. Call your insurer if you’ve left, either voluntarily or compulsorily, about your coverage. speak. Policies can vary by company and state, ”she said.

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