Model Mediation Program Helps Resolve Damages after 8 Hurricanes
From 2004 to 2008, the Collins Center helped homeowners and insurance companies resolve disputes over damage caused by eight hurricanes and two tropical storms that tore through our state in 2004 and 2005. With more than 25,000 mediation requests, this was the world’s largest post-catastrophic mediation program.
The Collins Center was selected to provide this service by the State of Florida. Our first priority has always been to provide courteous service, convenient and comfortable mediation centers, and a quality staff of mediators to help the parties reach a settlement.
The model has been so successful that Louisiana and Mississippi consulted with the Collins Center to set up their respective Hurricane Katrina and Rita mediation programs.
Mediation Program Background
The 2004 and 2005 hurricane seasons saw a record eight major storms hit Florida. The destruction ranged from Pensacola to the Florida Keys. More than 2.5 million property insurance claims were filed. While most of the property casualty claims were paid in a timely and professional manner, roughly 1 to 2 percent of the claims were disputed for a variety of reasons.
Many of these disputed claims involved issues related to adjusting mistakes, fluctuating construction prices, confusion over policy coverage, poor documentation of loss, or communication problems between the insurance company and the policyholder.
The Department of Financial Services (DFS) authorized a mediation program to address these disputed claims in September 2004, and operations began six weeks later. The purpose of the hurricane mediation program was to provide a fair, timely and cost-effective process to resolve disputes between insurance companies and their respective policyholders.
Mediation Program Success and Statistics
The hurricane mediation program has been successful. The total settlement rate for the Florida mediation program was 86 percent and the impasse rate was 14 percent. The individual settlements ranged from $50 to $1.5 million.
In the summer of 2007, the average settlement was estimated at $23,000 and the estimated total of all settlements as of June 2007 was more than $374 million. For more information on settlement statistics and mediation settlement percentages by hurricane, visit the Collins Center's 2007 Hurricane Mediation: Citizens Task Force on Claims overview (pages 14 and 12, respectively). The destruction recovery by this historically largest post-catastrophic mediation program is truly noteworthy.
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