When the ground shakes in Puerto Rico and it is time to head for higher ground, the people in the northwestern coastal city of Aguadilla find out the old way: the shrill of whistles.

Aguadilla is one of two dozen cities on the island that do not have emergency alert sirens, even as hundreds of earthquakes have rattled Puerto Rico for weeks. The sirens were destroyed during Hurricane Maria in 2017, and insurers still have not paid long-pending claims that would allow the cities to install new warning equipment.

“I’ve seen people in town with a whistle hanging around their necks,” said Carlos Méndez Martínez, who retired as mayor last month after almost 25 years of running the city.

More than two years after Hurricane Maria descended, destroying power poles, public buildings, homes, roads and other infrastructure from one end of the island to the other, an estimated $1.6 billion in insurance claims — particularly high-dollar claims filed by cities and condominium associations — remain unresolved. Emergency facilities, hospitals, stadiums, basketball courts, convention centers and other government properties around the island are still in shambles, waiting for repair because private insurers have not paid claims.

Hurricane Maria exposed an important deficiency in the process of Puerto Rico’s disaster recovery: underfunded private insurers, who are subject to few regulations.

While blame has been directed at the federal government for not providing timely disaster relief, less attention has been paid to the private companies that had a contractual responsibility to help clients who had paid premiums, many of them for years. Two insurers went out of business after Maria, and many of those that did not collapse offered pennies on the dollar. In many cases, insurers nearly doubled premiums after the hurricane while continuing to fight what the companies described as exorbitant and fraudulent claims.


Hundreds of lawsuits have been filed.

Aguadilla was left with no compensation for more than the tsunami sirens. The city sued its insurer, MAPFRE Insurance, after the Spanish company paid out $2 million for a destroyed coliseum that experts said would cost up to $20 million to replace, the former mayor said. Also left unusable were a water park, an ice-skating arena and an oceanfront boardwalk.

“Obviously the only way to attack this is with lawyers — without that, they don’t pay,” said José Alfredo Londoño, president of the Astralis condominium association, a 210-unit complex in the Isla Verde neighborhood near San Juan. “They are not going to pay.”

His complex’s damage totaled more than $13 million, he said, but MAPFRE offered $1 million.

“Ridiculous,” Londoño said.

Obviously the only way to attack this is with lawyers — without that, they don’t pay.” — José Alfredo Londoño

Out of an estimated $8.5 billion in insurance claims filed since Hurricane Maria, $6.9 billion have been paid, said Javier Rivera Ríos, who was Puerto Rico’s insurance commissioner throughout the wake of the storm. The remaining $1.6 billion, he said, were more complex cases that were taking longer to resolve.

The insurance battles on the island put a spotlight on the work of public adjusters, often hired by clients who suffer damage to help make their case to insurance companies. The nature of their job is to carefully read policies to determine everything a business, homeowner or municipality is owed. But in Puerto Rico, some of the insurance companies have accused public adjuster firms of pumping up claims in a quest for higher recoveries.

Alexis Sánchez Geigel, president of MAPFRE Puerto Rico, now the largest insurer on the island, said the company had paid more than $1 billion in claims. He said that nine of the 22 municipalities it covers have not been fully paid, and that seven of those use public adjusters.


“We have settled 99% of our claims,” he said, adding that company policy does not allow him to discuss pending claims. “Some of the allegations we have made are public.”

MAPFRE took an unusual and aggressive stance by suing two of its clients. The company took the cities of Cabo Rojo and Barceloneta to court, accusing them of submitting grossly inflated and fraudulent insurance claims.

MAPFRE offered Cabo Rojo $611,648 for its damage, while the city’s Mississippi-based public adjuster firm submitted a claim that surpassed $62 million, according to the lawsuit. In one multistory building, the adjuster said that every sink, toilet, urinal, soap dispenser and garbage can needed to be replaced, even though all of them, according to MAPFRE’s lawsuit, were in “perfect condition” and undamaged by the storm.

This was just one example of the kinds of inflated claims that insurers have been dealing with, Sánchez said. “Time will tell who did the right thing and if it was done properly or not.”

Cabo Rojo’s mayor, Roberto Ramírez Kurtz, said that he had not seen the claims before the public adjuster, Scott M. Favre, submitted them, and that was disturbed to learn the city’s claim was so high.

“I was bothered by that, and canceled the contract with the public adjuster,” Ramírez said. “It’s been a year with a new adjuster and we haven’t moved one inch forward. We have always acted in good faith. MAPFRE has not acted in good faith with us, and instead are punishing the people.”


Pedro Ortiz Álvarez, a lawyer who represents Barceloneta and several other cities, said insurance companies were using complaints about public adjusters as a red herring to distract from their own failure to make good on policies they wrote.

“They have used the subject of the public adjusters as an excuse,” he said.

The adjusters’ claims are often accompanied by matching estimates prepared by the Federal Emergency Management Agency, he said.

Favre, the public adjuster accused in MAPFRE’s lawsuit of inflating claims, said the insurance companies that have contested his claims cannot explain why so many experts agree with his damage estimates.

“When the estimate is greater than theirs, the insurance company calls that fraud,” Favre said. “But the disparity is often 1,000%.”

One municipal building he handled had panels blown off the roof, was flooded and lost all its windows.

“The carrier came up with $131,000. … FEMA says $4.9 million and then another contractor says $4 million. The carrier says, ‘You must be committing fraud.’” — Scott M. Favre

“The carrier came up with $131,000,” he said. “And then let’s say I go out there and go with experts and came up with $3.8 million, FEMA says $4.9 million and then another contractor says $4 million. The carrier says, ‘You must be committing fraud.’”


Favre’s company came under fire when it was revealed that the firm, which has secured at least 40 government contracts, used consultants closely linked to the ruling New Progressive Party.

Six complaints have been filed against Favre by both clients and insurance companies, the insurance commissioner’s office said.

Rivera, the former insurance commissioner, said in an interview before his resignation last month that the protracted claims process showed the need to reform existing insurance laws. Puerto Rico has recently adopted some measures to help consumers through the claims process, including mandatory arbitration to settle disputes.

“I think that I have to recognize it could have been a better response, and for that we have new regulations,” Rivera said. “Consumers learned a lot: They have to purchase insurance seriously and understand what they are buying. There is a mix of high expectations and bad insurance.”

But Rivera will not be overseeing any additional reforms; after a series of accusations of conflict of interest involving personal loans and other matters, he stepped down from his post last month.


In the interview, Rivera said that, on average, customers received about 60% of the amounts they submitted on their claims, and that the majority were settled within 10 months. Some who got nothing from their insurance had to settle for payouts from a government catastrophe fund, while others are waiting for assets of the failed insurance companies to be distributed. Every insurance company on the island was fined for some deficiency or another, Rivera said.

He said his office sued several insurers for delaying claims until after the statute of limitations for a customer to file a lawsuit, an issue that was addressed with the new legislation.

Puerto Rico’s nonvoting representative in Congress, Jenniffer González-Colón, said the continuing problems and series of new disasters highlighted the need for better federal oversight over insurers.

Iraelia Pernas, executive director of the Puerto Rico Insurance Companies Association, said that some customers were not sufficiently insured, and that the companies also saw a lot of fraud, such as pictures of the same broken window that were submitted for all the units in a building.

“Condominiums have similar windows; we can compromise on that,” she said. “But it is not possible that every apartment had the same air-conditioner, the same things on the table.”

A few public adjusters were asking for more than the policy limits, and some overestimated prices, claiming that a sink cost $600, she said.


“It’s a public restroom,” she said. “We are not talking about marble.”

While the cases wind through the courts, people like Luis M. Rodríguez Rivera, a 54-year-old disabled diabetic, are left in the lurch. Hurricane Maria soaked Rodríguez’s home in Guayama, cracking the floor and leaving it covered in mold.

“It’s as if it sprouted cracks and is exploding,” he said.

Rodríguez, a former school technology specialist, now alternates between staying with his mother or — when he does not want her to see him weeping — in his car. The law firm he hired estimated that his house needed $92,000 in repairs; MAPFRE gave him an $8,000 check his lawyers told him not to cash.

“It’s like I’ve fallen into a trap,” Rodríguez said. “You don’t know when you’re going to get what is owed to you to fix your house and live with dignity.”