There's a not-so-hidden cost to the tornadoes that struck the Southeast on April 27.
Insurance agencies nationwide paid out more than $25 billion to repair damage caused by tornadoes and thunderstorms in 2011, more than double the previous record.
Now, insurers are gearing up to raise rates up to 18 percent in 11 states, including Alabama, Georgia and Tennessee, according to the Consumer Federation of America.
Those rate hikes don't include the April 27 storms, yet. Tornado damage won't really start to show up in premiums until 2013, state officials said.
In spite of record-breaking damages, most homeowners are now back in their homes.
The insurance industry usually moves like clockwork, as long as all the facts fit neatly into predetermined boxes, policyholders say.
But when life after April 27 didn't fit neatly onto a checklist, the outlook clouded over for a handful of families.
For some, it was the moment they realized that life isn't fair.
Bill Chapman lived in a flimsy tent during his winter standoff with Travelers that erupted over a crack in his foundation. Contractors wouldn't start work until it was fixed; the insurer wouldn't acknowledge it existed.
The Morrow family waited for months with no permanent place to live, haggling with Farm Bureau over whether roof damage was caused by wind or rain. Their insurance was canceled after they took their story to the press.
Others waited weeks or months for help to arrive, as living rooms transformed into swimming pools for mosquito larva. Hundreds of homes simply rotted where they stood after their occupants decided walking away would be easier.
Consumer watchdogs say that the industry is now preparing to enact new rules to decrease payouts when disaster strikes.
Insurers counter that they're a business, not a charity. Homeowners have to exercise some individual responsibility, they say.
The fact is, most of these cases go smoothly and end with happy customers and new homes, they say. Only a few holdouts, who sometimes refuse settlement offers, fall through the cracks.
the good, the bad and the moldy
Fewer than 400 homeowners' claims are still pending from the April 27 tornadoes in Georgia, or about 3 percent, according to the Georgia Insurance Department.
Complaints in Georgia actually went down in 2011 to 1,407 from 1,775 the previous year, while complaints in Tennessee rose to 1,200 from 761 the previous year, according to state figures.
Insurers typically redouble their efforts during a disaster, knowing their behavior will be scrutinized for years to come.
Sometimes, that isn't enough.
Shirley Deakins won't be featured in any insurance marketing campaigns. After a year, she isn't sure what she dislikes more: the churning shadow that changed her life on April 27 or the company that refused to replace the rotted house that she used to call home.
"Not only has Travelers delayed and delayed on that policy with me old and sick, but they've let the house go to hell," Deakins said.
She's in the hospital now. Her home was finally bulldozed to the ground almost a year after the initial damage left it a cracked, leaking mess.
"They delayed until it got so bad you couldn't build it back," she said.
But they won't pay for the replacement. They'll only pay for the original -- now irrelevant -- repairs.
Her son, Derek Smith, says she's suffering from internal bleeding, maybe from the stress.
"If the thing had been handled right from the get go, it possibly could have been salvaged," said Smith, who works in Florida for a power company.
According to Smith, Deakins has been through five agents in 12 months. Her living expenses were only paid for six months. And she didn't receive a nickel until three months after the storm hit.
• Create a home inventory using a mobile app like the free "Know Your Stuff," program available on the app store.
• Determine whether your possessions are covered for their replacement value or depreciated actual cash value.
• Create emergency plans, using resources like Ready.gov/Tennessee or Ready.gov/Georgia
• Conduct run-throughs of emergency plans for different disasters. For instance, a fire in a two-story building requires a rope ladder, while a tornado requires a safe room.
Source: Georgia Insurance Information Institute
A neighbor says it's her own fault. Deakins refused offers from the insurance company to fix the house instead of replacing it.
But the house was damaged beyond repair after delays left it open to the elements, according to contractors and architects. Cracks in the roof left her home filled will black mold in spite of a few ineffective strips of tattered blue tarps installed by the insurance company after the storm.
The house wasn't structurally sound, local architects said. The rotting walls had to be torn down and replaced, she finally decided.
So after a year of living in FEMA housing and bunking with neighbors, Deakins took the money she had received thus far and leveled the house herself on April 1 -- her 80th birthday.
Travelers declined to comment on Deakins' situation, citing privacy issues.
It's really a numbers game. She paid $40,000 to get into the historic North Chattanooga home. Travelers gave her about $90,000, all-in.
Her policy covered a $194,000 replacement. Builders told her it would cost $130,000 to rebuild half of what she had before.
"I don't have enough money, so I'm having to borrow money to build it," she said.
Most homeowners polled after the storm praised their insurers.
Carlos Garcia lost about 40 percent of his home to a toppled tree. The next day an insurance adjuster arrived. Soon after, the tree was removed and workers began rebuilding his house.
"They've shown a lot of interest and care," he said.
That's the way it's supposed to work, and it usually does.
Before the storm was over, insurers set a massive mobilization in motion. Thousands of adjusters converged on the tri-state region from across the country.
Larger providers such as State Farm rolled out mobile claims units to church parking lots as soon as roads were clear of debris.
After all, a disaster is the best time to make a good impression on customers and benefit from positive word-of-mouth, insurance officials said.
And they had plenty of opportunities.
The 2011 jump in tornadoes to 1,691 from 1,282 the year before -- including 758 in April -- combined to create the most expensive thunderstorm season ever, at more than $25 billion in insured losses, according to the Insurance Information Institute.
The April tornadoes alone cost insurers $3 billion in Alabama, which was the most heavily damaged state, followed by $2 billion in Tennessee. Georgia came fourth with at $435 million in damages.
It was also the deadliest thunderstorm season in the last 75 years, with 552 killed directly by storms, the institute reported.
Yet the number of complaints in Tennessee and Georgia combined rose by only 70 to 2,606, according to state officials.
The fact that insurance companies shelled out enough storm money to fund the Manhattan Project doesn't make Deakins' life any easier.
She now has three months of living expenses left, but her builder says her new home, which she is funding herself, won't be ready in fewer than four.
When her son set up a meeting with Deakins' adjuster a few weeks ago, Travelers' Phil Vaughn didn't even show up.
Vaughn declined to comment for this story.
"I strongly believe that they have done her wrong," Smith said. "I have State Farm and every claim I've ever had they were bending over backwards."
But insurers may soon shift more cost and more risk to consumers, according to the Consumer Federation of America.
Insurance agencies are supposed to make a profit for their shareholders, and watching the equivalent of the entire 2007 U.S. foreign aid budget go out the door has some worried about future returns.
As a result, agencies have requested homeowners insurance rate increases of 18 percent or more, the CFA reported.
Reuters reported that State Farm already hiked premiums 5 percent in Alabama in November 2011, and sought a 15.8 percent increase for mobile home coverage in Mississippi.
The CFA doesn't buy the hard luck story, and charged that insurers are just padding their surpluses while providing less coverage.
According to a Feb. 17 report, "insurers have hollowed out the coverage they offer to homeowners by increasing deductibles and capping the amount they will pay if the home is damaged or destroyed."
Deductibles of between 2 percent and 5 percent force homeowners to pay thousands of dollars more before their benefits kick in, and limits on paying to bring old homes up to code place a larger financial burden on stricken policyholders and hapless taxpayers, the consumer advocacy group found.
In addition, if a storm damages a house and a flash flood later rushes through, insurers may decline to pay anything because of what's called an anti-concurrent causation clause.
"In the last 20 years, insurers have been so successful at shifting costs to consumers and taxpayers that they are currently overcapitalized and cannot justify higher homeowners' rates," said J. Robert Hunter, director of Insurance at CFA and former federal insurance administrator.
According to the CFA's research, insurance payouts as a percentage of total losses have steadily decreased, using the response to hurricanes Andrew and Katrina as yardsticks.
"Insurers' surplus would have risen by $15 billion in 2011 even with the tornadoes and floods that caused huge losses, if they had not paid stockholder dividends," Hunter said.
The kicker is, the already-rising rates don't yet reflect the April 27 losses, according to state officials.
Shannon Ashford, a public information officer for the Tennessee Department of Commerce and Insurance, said that 2011 losses won't show up until 2013.
That's because rates are based on a three- to five-year running average of losses to make payments more predictable.
"While calendar year 2011 is closed, accident year 2011 will be open for years," Ashford said.
Rates in Tennessee have risen as much as 25 percent on a statewide average basis in 2011, and could rise more after the storms are calculated into the equation, Ashford said. But that's due partially to low investment income through the recession and steadily increasing storm damage in prior years.
"Catastrophe loads are spread over a long period of time and are not thrown into the annual data, which would cause large swings in price when a storm hits," Ashford said.
The Georgia Insurance Department reported that insurers haven't reduced their coverage, but are pinching pennies in other areas.
"We have seen companies revise their base deductibles, say, from $500 to $1,000," said spokesman Mitchell Madaglia.
To be fair, insurers have correspondingly credited policyholder premiums to reflect the higher risk imposed on the consumer, Madaglia said.
But other tactics are less transparent.
"There has been some discussion with carriers wanting to start new companies and offer a new homeowners product that would provide reduced coverage in some areas -- such as actual cash value on roofs in lieu of replacement cost."
The difference is that the depreciated value of a home would be far less than the cost to replace it. A 20-year-old roof, for instance, would be worth little compared to a new one.
None of these plans have been approved yet, Madaglia noted.
After the storm is over, however, insurers have to make money to stay solvent.
Increased residential density in formerly rural areas increases the likelihood that any given tornado will run amok in a neighborhood, and agencies are reconsidering why it's their responsibility to replace an 18-year-old roof with a brand-new one instead of an equivalent product.
But then, why even have insurance if you end up with the exact headaches that you pay premiums to avoid, asked homeowner Angie Morrow.
"It mentally and physically wears you out," she said. "That's the part that's been frustrating."
The Morrows made headlines when they outed their insurer for allowing their house to remain a wreck after six months. They hung a giant sign on the front of their roofless house that informed neighbors that they were insured through Farm Bureau.
The family finally moved back in three weeks ago, after spending $20,000 of their own money and performing 30 percent of the repairs themselves. After their story ran in the newspaper, Farm Bureau canceled the family's policy, Don Morrow, said.
"They said they were canceling us because we were unhappy with their services," he said.
But there was a silver lining. More than $10,000 came in from concerned citizens and neighbors over the past few months.
"They just asked us to pay them back when we can," Morrow said.
Morrow plans to pay back every dime.
Because he believes that paying what you owe is the right thing to do.