JEFFERSON CITY, Mo. (AP) - After the powerful tornado tore through his southwest Missouri hometown in May 2011, Joplin resident Chuck Surface said he and his wife had to not only rebuild, but spent several weeks trying to figure out how much all the property inside of their one-story brick house had been worth at the moment it was destroyed.
Surface, a former state representative who now works in Webb City, said this past week that his home insurance company quickly paid him for the full value of his destroyed home in the southwest part of Joplin.
But the same insurance company said he would have to fill out pages of claim forms before he received any money for the home's contents. Surface said he lost records for most of the property in the twister and said he and his wife simply had to estimate the value of some antiques, relying on searches of Internet sites, such as eBay.
"It took a long, long time," said Surface, 68. "If you lose everything, you have no idea unless you walk down to Sears or some place and start writing down what you lost."
Surface did eventually get paid for the full insured amount of his home's contents. But now a state senator says Missouri should change its insurance laws to help victims of tornados and other natural disasters get paid more quickly for the full value of their home insurance policies.
Current Missouri law says that home insurance companies must pay the full value of a person's insurance policy, including for its contents, if the home is destroyed by fire. In all other cases, they are only required to pay the home's market value.
Sen. Ron Richard, a Joplin Republican elected to Surface's House seat in 2002, told a Senate insurance committee this week that the state should expand the full payout law to apply to everyone whose home is completely destroyed by anything covered in their policy.
Richard showed committee members pictures of devastation from the tornado, which killed 161 people.
He said after the storm, several people whose homes were destroyed complained that insurance companies tried to pay less than the full value of some policies by asserting that the down housing market had lessened the homes' actual values.
Other insurers required many forms for details about contents, similar to what Surface had to fill out.
"It's worse than filing your income taxes, filling out these forms to get the value of your contents," Richard said. "If you're paying for a certain amount of coverage, you should get that amount of coverage. There should be no negotiation when there's nothing left. "
But Charles Burhan, a lobbyist for Liberty Mutual Insurance Group, said Richard's proposal could drive up insurance rates for homeowners across the state. He said Liberty Mutual paid out the full face value of insurance policies in Joplin, on both homes and their contents.
"When we saw this, we went beyond the contract because it was a hardship case," he said. "It was a rare, dramatic and unbearable hardship."
John Huff, director of the Missouri Department of Insurance, praised the insurance industry for paying out more than $1 billion in claims in three months after the disaster.
But Burhan said broadening state law to require a full payout for any total home loss would be expensive, because insurance companies would have to assume that a home could be destroyed by any number of things covered under the policy. Fires, he said, are rarer and statistically predictable, meaning that the current requirement isn't a very expensive part of home insurance.
Rather than broaden the law, Burhan said, the state should first study how often homeowners were receiving less than the insured value of their destroyed homes.
He also defended the paperwork requirements for a home's contents after a disaster.
Burhan said people's possessions frequently change, and he said mandating that insurance companies pay out the maximum amount without any verification of what a person owns could encourage people to commit fraud when buying a policy.
"This is a very complicated issue," he said. "I wish it were simple, but it's not."
Richard countered that changing the law would take away one potential worry for people who lose their homes in future disasters.
"You don't need to do a study," he said. "If you ask for it and you pay for it, you ought to get it."
Tornado insurance bill is SB619