For a few months now, the insurance industry has been touting the alleged statistic that 95-96% of New Jersey insurance claims from Hurricane Sandy have been closed. I have had many conversations with clients, public adjusters and other attorneys in the industry and, frankly, nobody believes this statistic. Turns out, this is an accurate, albeit completely misleading, statistic. . . .
I recently had an opportunity to attend a litigation conference where Kenneth E. Kobylowski, Commissioner of the New Jersey Department of Banking and Insurance, gave the keynote address. The Commissioner stated that the insurance industry had reported the 95% closure rate for Sandy claims. However, in response to a question from the audience, he stated that those closure rates included claims where the insurance carrier denied the claim and no lawsuit had yet been filed. An improper denial or underpayment would count as closed. Thus, while the 95% statistic may be accurate, it clearly demonstrates how word play can be used to hide the truth.
Another interesting topic discussed by Commissioner Kobylowski was the Hurricane Sandy mediation program instituted by the Department of Banking and Insurance. The Commissioner indicated that there are more than 20,000 claims remaining open. Of those claims only about 300 have applied for the mediation program, a statistic in which the Commissioner admitted he was disappointed. However, Commissioner Kobylowski did report that 85% of the mediated cases came to a satisfactory resolution, a number he was happy with.
Finally, with all of this talk about wordplay, I couldn’t end this post without sharing this:
