state and state farm insurance companies explaining that these companies engaged in fraudulent practices by low-balling estimates on houses that were severely damaged. this is about two hours. >> let me call to order today's hearing, examining the insurance claims practices following recent natural disasters. this is the first hearing of the subcommittee on disaster management and i'm delighted to work on this committee with my

colleaguing the o ranking member senator kim. this has been a great, great start to our what i hope will be a great collaboration and i want to say a special thank you to our witnesses who are in the room and will have a chance to hear from each of you in just a moment. i'm going to introduce each ofto you and give you the opportunity to make an opening statement and then we will have some rounds of questioning. before we that, let me just say a word about what brings us here and the l significant of this hearing sters have devastated communities across our country. in the state of missouri, tornadoes have ripped across the state leaving homes damaged, in some cases leaving families without loved ones. hurricanes milton and helene had a brutal path through the southeast, uprooting trees, turning family lives into a nightmare. in california, brutal wildfires have burned entire communities to the ground. these disasters have done more than cause property damage, though that is quite

significant. they have done more than cause inconvenience, they have destroyed the lives of people. we are not talking about minor inconveniences. we are talking about moms who had to haul five gallon buckets of water because the pots are gone. we are talking about grandparents who had to sleep in their cars because there is no roof over their heads. were talking about families who are maxing out the credit cards because their insurance companies won't pay out any damage claims. where do americans turn after catastrophes like the ones we've experienced just in the last calendar year. the answer is they turn to their insurance companies. this isn't charity we are talking about. they turn to their insurance because they pay premiums to those insurance companies. it's a contract, and by the way, it's required in law. americans are required to purchase insurance and so they do so, dutifully.

in every state in the union, and they pay their premiums dutifully in every state in the union. and unfortunately, time after time, i find when disaster strikes in their moment of utmost need, the insurance companies come back to them and they delay, and they deny, and they offer excuses and they send out two adjusters or three adjusters and 15 or 25 adjusters and they constantly change the estimates, and at the end of the day, they just won't pay what is due, what is required, what is just. and is not a one-off situation. it's not like it's happened to just one family. it is a deliberate strategy to maximize profits. we will hear about it today on this panel pay would let me just give a brief overview of how it works. it goes something basically like this. when a disaster destroys let's say your home, the insurance company sends out often a third party adjuster. that person writes up a report,

often in good faith, doing their best to estimate the damages. then the insurance company intervenes. then the insurance company says you need to change the facts that you found. need to change your estimates. you need to change what is in the report and they adjust arbitrarily the award down, down, down. and the policyholder never knows. and the policyholder gets no say in the process. in the policyholder is left to try and put together her live as these insurance companies make aliens and billions of dollars in profits. we are going to hear about it from the witnesses that are here today. even before today's earring, committee staff, my staff, working with senator kim, has done a thorough investigation, and we will be submitting into the record evidence today that we have gathered that will corroborate the testimony you are about to hear. this is a system we are talking about, system that promises homeowners that they are in good

hands him a that they will watch over them like a good neighbor, and after billions and billions of dollars in premiums are collected and pocketed by these insurance companies, the people who are left holding the bag are the policyholders. american citizens. at their moment of maximum despair. there's something wrong with that system. there needs to be some accountability, and we will do our best to start getting it today. with that, let me turn it over to ranking member king for his statement. >> i want to congratulate senator hawley and i hope we will continue productive bipartisan work. the chairman laid out strongly, this is about where do people turn when a crisis arises, when they are in their time of deep need. some grateful for the witnesses here for joining us and giving us your insights to the different experiences that you've had to try to elucidate what is that we can do here in

congress to be able to make sure that the american people have that sense of assurance when they -- when disaster strikes, when they are in their time of greatest need. and that is a time when survivors are most vulnerable, that is when many americans turn to their insurance company thinking that they have done everything right to prepare for the worst, thinking that the process would work for them. unfortunately, that help doesn't always materialize and instead of being handed solutions, they are often met with more problems. my home state of new jersey is no stranger to this. after superstorm sandy, insurance companies that participated in the national flood insurance program were found to be wrongly rejecting or underpaying valid claims. since income of the problems have persisted. hurricane ida, another challenge that we face, cost another wave of damage to my state.

it's not just in new jersey but across the country. in florida after hurricane ian, third-party adjusters came forward and ensure -- accused insurance companies of altering their reports to underpay disaster survivors. we are here to examine additional disturbing claims that insurance companies are continuing to deny coverage and underpay claims. this is an important topic. i also want to take the time as we move forward with these subcommittees work, to ensure that we are taking a holistic approach, grappling with the problems that american people face when they try to recover from a natural disaster. that includes having honest and productive conversations about the government's role him a particularly fema, in the wake of a natural disaster, fema has been a critical lifeline for so many americans on the road to recovery. yes, he needs reforms, yes, there are changes that need to happen. but that is something we can try to work on in a bipartisan way. emergency managers, first

responders and other people in my community are deeply concerned by some of the rhetoric coming out of this administration about abolishing or getting rid of it. we are seeing some of the trump administration efforts to chip away at some critical programs. we see canceling of the building of infrastructure, we have to take a step to be able to think through our role here in congress on this going forward. fema, like private insurance, is one of the tools that the make and people have available to them. we need both markets solutions people in disaster prone states i've talked to have spoken about fear and uncertainty about what comes next when it comes to disaster recovery. we owe it to them to be more transparent about this. the administration has assembled a counsel to review fema disaster response and i think this subcommittee can do our own due diligence so we can be prepared to engage in discussion

with the executive branch about the best way forward. the goal is always to ensure the american people in their time of greatest need into difficulty can feel reassured they are not alone, that they can turn to others for help, whether that be fema, insurers, or others. we are facing some of the most intense natural disasters in our nation's history but also living through a time of such distrust in government, public institutions, etc.. congress must be vigilant about changes that could weaken the ability of the american people to tackle the disaster challenges they face. i look forward to hearing from the witnesses about their experiences and the insurance companies about how they plan to do better. we may hear some harsh criticism, criticism i hope will work to rectify these problems. i want to make sure we are commending some of the insurance companies for showing up today to be able to hear that feedback. i yield back.

chair hawley: it's the practice of the subcommittee to swear in witnesses who testify before us. i will ask you to rise and raise your right hands and repeat if you will. do you swear the testimony you will give today is the truth, the whole truth, and nothing but the truth so help you god? let the record reflect that each witness answered in the affirmative, that's a good start. with this, let me go down the line and introduce each witness and give each of you the opportunity for an opening statement. we will start with natalia, who is an allstate policy holder who lives in georgia and suffered extensive property damage following the devastation of hurricane helene. go ahead, please take your time. ms. migal: my name is natalia migal and i'm here representing my family. my husband, our 11-year-old son

and nine-year-old daughter. we live in sandy springs, georgia, and our house is insured by allstate homeowners policy. in september, 2024, our family was abruptly woken by a loud crack. a 70 foot oak tree fell onto our home. this happened after persistent rain from hurricane helene. we immediately called allstate to file a homeowners claim. the intake process was quick and we were promptly assigned an adjuster. the general description of the damage is as follows -- while we can still live in the house, there is severe and structural damage to our roof on two separate building structures. damages are internal and external. in addition, electrical systems, brick work, gutters, doors and more were damaged.

the total damage was very extensive and has been thoroughly documented and shared with allstate. allstate's first inspection took place a few weeks later. our first adjuster visit took approximately five hours. the adjuster was very detail oriented and thorough. he spoke with us at length and took copious amounts of photos. he verbally confirmed what we suspected -- this was a significant loss. after the initial inspection, i followed the guidance and contacted a number of contractors, including but not limited to general contractors, roofing contractors, electricians, chimney, landscaping and fence repairs. as provided with a number of -- i was provided with a number of quotes that reflect of the cost of living and needed repairs to bring our house back to standard. these quotes were shared with allstate. however, before the adjuster could could complete his report, allstate removed him, stating the process was taking too long.

we called allstate many times to stress we wanted to continue the process already in flight, but nonetheless allstate sent a new adjuster against our wishes, a new inspection was scheduled and the process started all over again. the second inspection was under two hours and significantly downplayed the damage. for example, the adjuster stated he would include money only for one half of the collapsed roof because he was not convinced all of it needed repairs. i assure you, the entire structure did need repairs after the impact of the 70 foot tree. in december, we received allstate's initial valuation of $46,000 and we were stunned. this amount did not begin to reflect the real world cost of the repairs and estimates from contractors. it was perfectly clear that working with allstate will be increasingly difficult.

on january 6, we retained matthew hunter of hunter public adjusting for an independent view of the situation. matthew conducted a multi-day inspection and confirmed our fears. he also recommended hiring a structural engineer. we engaged with shields engineering group, whose report again confirmed our concerns. our damage was extensive and the cost to restore our home was far beyond allstate's offer. matthew also formally requested they reassign our claim to the large did -- the large loss division. despite repeated requests, these were consistently denied. in march we submitted our proof of loss of $497,000. only then did allstate reassign our case to the large loss team who appointed a third adjuster. a few days later, matthew met with the third adjuster on site.

the adjuster reviewed the engineering report and matthew's estimate and expressed no disagreement. he stated he would submit the full estimate for approval. however, the final estimate came back from allstate at just under $100,000. when matthew contacted the adjuster for an explanation, the adjuster said that allstate rejected his submission, instructing him to remove numerous line items not once, but twice until the amount was reduced to a fraction of the actual loss. this brings us to may, eight months since a tree fell on our house. no significant repairs have been made, our roofing is damaged in -- and a hazard to our family. electrical wires invisible, doors difficult to close, fences broken and much more. as you can imagine is difficult to embark on a reconstruction

project without clarity on the budget. we are homeowners. not lawyers, not engineers, not insurance experts. we have been allstate customers for six years, since october 2019. during that time we have paid our bills on time and in full. but when we needed allstate the most, they failed us. this is no longer about just a roof. it's about the failure of a system that leaves families vulnerable after catastrophic events. we respectfully call on this body to improve oversight to make sure insurers are held accountable when they act in bad faith, delay resolution or make it financially impossible for families to restore their homes and lives. thank you for your time, your service and hearing our story today. chair hawley: thank you very much. our next witness is mr. nick schroeder, an adjuster who works for allstate through pilot