Hoteliers threaten reluctant insurers with legal action

January 19th, 2006 by Steve Bridger filed under Cancún, News

Many of Cancun’s classiest hotels and tourist attractions pummeled by the hurricane have resorted to borrowing as insurers dither over post-Wilma payouts.

On Monday, during his stop in the resort for the start of the beach recovery project, Tourism Minister Rodolfo Elizondo Torres angered hoteliers by suggesting that some had not kept up with premium payments while others had exaggerated claims of damage to property. "The government," he said, "could not intervene in what were ‘personal’ disagreements."

The Governor of Quintana Roo, Félix González Canto, said insurers had been slow to react in the aftermath of the hurricane. He accused the industry of taking advantage of every available "legal loophole" not to respond to appeals from businesses affected by Wilma and withholding payouts.

Insurers deployed adjusters in the region to manage claims from the areas devastated by Wilma. However, Jesús Almaguer Salazar, president of the Cancun Hotels Association, declared that his members had so far received just 20% of the estimated US$1.5 billion worth of damage caused by Wilma – the costliest disaster in the country’s history.

Feeling "abandoned" by their government for not pressurising the laggards on their behalf, hoteliers have left open the option of bringing legal action against them to release the money

However, the federal financial services watchdog – Condusef by its Spanish acronym – has advised that any such move would ultimately prove unsuccessful.

I’m not in a position to pass comment on whether insurance companies have let the hotels down, other than to add that there’s no question that last year’s record-breaking hurricane season stretched the resources of the entire insurance industry.

By January 3rd, insurers had received 11,000 claims from Cancún alone.

It seems to me like a vicious circle: funds not released with enough urgency to pay construction crews and for repairs means hotels remain closed for longer than planned. With reduced – or zero – income from tourism, resorts cannot get on with rebuilding.

By January 20th, around forty-four per cent of hotel rooms in Cancún were operating normally.

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One Response to “Hoteliers threaten reluctant insurers with legal action”

  1. » Blog Archive » Getting Cancún hurricane-ready Says:

    [...] Right on cue, Sean Mattson poses some questions about hurricane preparednes in Cancún in an article for the San Antonio Express. He remarks on how insurers have announced higher premiums and are now more demanding of construction quality. You may recall the I wrote about in January. * * * [...]