Most homeowners believe that insurance policies will protect them when a disaster occurs. However, the illusion was shattered for Natalia Migal.
Testifying before the US Senate, she recalled how Hurricane Helen destroyed her Georgia home. Only $46,000 In the case of repairs, despite an independent rating, the damage is brought closer to $500,000.
Driving into Allstate’s recent financial statements, Sen. Josh Hawley questioned the company’s decision to reward C-Suite after increasing revenue and profits while policyholders like Migal struggled to compensate for losses.
“CEO Tom Wilson was paid $26 million,” he said. I said Under hearing.
“Mr. Miguel can’t pay her claims, but Tom gets everyone $26 million. Why is his salary a priority, but isn’t Miguel?”
Unfortunately, the Migal case is not an outlier. As evidence builds up from policymakers and industry insiders, lawmakers are stepping up scrutiny of the $1 trillion property insurance industry.
Testimony before Congress on May 13th is not only policyholders, but also adjusters who assess losses and estimate losses, industry experts. Two of these adjusters testified that they faced pressure to lower their initial estimates and were wary of the committee.
“We just heard the testimony here and have vowed testimony from multiple coordinators. Your company ordered that you remove or change your damage estimate to reduce payments and make a profit,” Holy told Allstate’s executive vice president and chief claims officer Michael Fiat at the hearing.
“It sounds like you’re running an institutionalized system of fraud.”
Fiat pushed back the charges by highlighting the fact that insurers are handling more claims due to changes in weather patterns and the frequency of natural disasters in recent years.
However, Holy noted that this additional risk was not reflected in the company’s finances.
“You have to realize that your profits have improved more than ever. They’re really, really extraordinary,” he said. “In 2024, AllState revenue was $64 billion, up 12% from the previous year.”
