Insurers balk at paying out to 1 million Katrina flood victims

[bpilgrim]

News > Business
Published: 11 September 2005

Millions of people forced out of New Orleans by Hurricane Katrina may not be insured for the damage to their homes.

More than half of the properties in the city are understood to be insured only for hurricane damage, with insurers insisting that it was a flood that forced the evacuation of the city.

If US courts agree, this could save the insurance industry as much as $10bn (£5.4bn) and leave more than a million people destitute.

Typical US household insurance policies do not cover for flood damage. Instead, homeowners have to buy a second policy through the National Flood Insurance Programme, part of the much- derided Federal Emergency Management Agency. Only 46 per cent of New Orleans householders had purchased one.

Article Length: 389 words (approx.)
http://news.independent.co.uk/business/news/article311704.ece

peace

[JCMach1]

1. Salvo 1 for an industry bailout by the FEDS

It will happen... bank on it.

[BooScout]

14. Not likely

The industry wasn't bailed out after 9/11 and it won't be bailed out now. There's no need to. The industry shares the risk and reinsures itself for catastrophic claims such as this. Insurers worldwide will share in the claims payout on this one.

[TankLV]

35. It was baled out after Iniki and Iwa in Hawaii - a surcharge was added

to all surviving insurers in the state after most of the biggies left the state because of the "risk". No existing policies were renewed when the terms were up. The state had to create a special department to set up insurance for everyone. They addad a surcharge to all policyholders in the state to cover the "fund".

I know, I lived thru it - still do.

[blue sky at night]

2. really nothing new here.........

the insurance companies have done this forever...ask anyone who lives in a floodplain. I am not saying it is right, but thats the way life goes...the big insurance companies have no conscience when it comes to parting with their money.

[MercutioATC]

9. It's a matter of what's in the contract.

If the contract doesn't cover flood damage, they wouldn't have to pay out on most of the NOLA claims.

There's nothing wrong with this...it's what the people agreed to insure.

[BooScout]

13. Exactly correct....

In addition, no one in New Orleans would have been able to get a mortgage without taking out Flood insurance thru FEMA. They took it to get the mortgage and then dropped it. Flood Insurance averages about $33 bucks a month nationally. Those that don't have it will be eligible for low interest loans at around 4% from FEMA.

Private insurers don't usually sell flood insurance because it's cost prohibitive. Their policy holders would scream bloody murder if they were subsidizing someone elses flood insurance.

[lynne]

16. You are right -

- but I imagine that the inner-city of NO has a lot of renters. I seriously doubt if they have regular tenant homeowners coverage, much less flood coverage for their contents. Same for store owners renting their space.

For those who own property that is financed, the lienholder normally requires that a renewal certificate for the flood insurance be received annually. Of course, once the property is paid for, the owner has the option of dropping the flood coverage entirely.

[BooScout]

17. Not necessarily....

I unescrowed my homeowners insurance several years ago from my mortgage company. They have not checked once to see that it is in force.

[lynne]

18. Isn't your mortgage company listed as lienholder -

- on the policy itself? Even if it isn't escrowed, they will still get a copy of every renewal, every amendment and any pending cancellations.

Do watch out . . . if they require a specific coverage and you do not have it, lienholders will place the coverage themselves. Usually only enough to protect their interest. Then - when you think the property is paid off - you will see that you have to pay the premiums for the coverage that they placed. And the coverage that they place is sometimes through specialty carriers that have higher-than-regular premiums.

[Saintgermane]

31. As a lender...

I can tell you that you are exactly correct. What you are referring to is called "force placing' insurance. Generally, if your mortgage company is paying attention, they will notify you of the lapse, and your responsibility to carry insurance.

If, after repeated warnings, you don't prove coverage, they will contract for insurance on their own.

The lender's coverage will cover only their exposure - that is, it will cover the mortgage, but will not cover any ancillary losses you may incur in a flood.

You will be legally obligated to pay these premiums.

[SoCalDem]

33. The poorest of the poor probably could not afford renter's insurance

and even that has limitations.. When we were first married, we rented and had insurance, but I think it was secondary to what the landlord carried on the actual building..

[oneold1-4u]

27. Subsidize your neighbor

If you are paying for any type of insurance, you are subsidizing for all who are insured for any type of loss. The insurance companies never lose! Each day that they put off paying out for any policy, they are collecting billions and receiving more billions in interest on all kinds of bonds (many not taxed). The US Government would be more likely to fail because that kind of SMART manipulating isn't a government that out-spends every day for an excuse to tax more!

[barb162]

40. Actually some Florida insurers did go out of business a few years

ago as I recall

[lynne]

45. Quite a few insurers -

- went "tit's up" after Andrew. Some went out of business completely and some reigned in their business so that they were writing almost nothing new and absolutely no property. The last few years property insurers have been getting hit hard. Not only have hurricane's been the problem but hail has been generating more-than-usual claims in some states.

[Laelth]

48. I think there is something wrong with that.

The courts should find such contracts unconscionable and rule that the insurance industry has to pay for all natural disaster damage regardless of what the fine print says. Hardly anyone except the insurance companies' lawyers ever read those contracts. It's not like the insurance buyers had the ability to "negotiate" and agree. It's just another example of the insurance companies using the law to weasel their way out of coverage and increase their profits.

:puke:

-Laelth

[MercutioATC]

49. There's no "fine print" issue here, it's clear what's covered and what's

not.

It's NOT "unconscionable" to offer an insurance package that covers a set range of events at a set price. It's also not "unconscionable" to refuse to offer certain types of insurance in certain areas.

Granted, you can't usually negotiate insurance policies, but anybody who buys one and doesn't read it is a fool.

[losdiablosgato]

65. Meet why I have flood insurance

[lynne]

55. Insurance contracts are like all other contracts -

- the content and scope of what you are purchasing is there for you to see prior to signing. It is no surprise that flood is not covered under the basic homeowners contract as it has never been. People living in flood plains are well aware of their exposure especially if they own property as they are required by their lenders to carry flood coverage.

I suggest everyone pull out their insurance policies and look for the portion which says "EXCLUSIONS" to find out what is specifically NOT covered. It's all there in black and white.

It's not so much a matter of "weasling" out of paying but more a matter of paying according to the contract purchased. It will take months to sort out all the claims as the scope of this disaster makes it physically impossible for adjusters to be everywhere at once. There just aren't enough to go around.

[SemperEadem]

68. As long as insurance companies have strong lobbyists in DC

Congress is never going to write any law that will go counter to their aims... they all know that they're going to be running for re-election and they need $$ for their campaigns. They'll keep doing what the lobbyists tell them to do... and they'll keep writing laws which screw the ordinary citizen and benefit the rich and the corporations.

Joe/Jane average don't have lobbyists to send to DC.. we're stuck with the ones we elect... I don't think anyone roaming the halls of congress or the senate who hasn't been elected should be allowed to weigh in on any policy in any way, shape or form.

[Laelth]

80. As I understand it ...

the insurance industry is mostly governed and regulated by state law. Nevertheless, I agree with your point, in principle. I would add, however, that state legislatures tend to be even more corrupt and even easier to influence through campaign contributions than the national legislature. This is especially true where I live, in the deep South.

Whenever people claim to support states' rights and the weakening of the federal government in favor of the states, I point to the insurance industry as an example of why this is a bad idea. State legislators are only barely accountable to the people they represent. State legislators tend to be poorly paid, and the citizenry generally pays less attention to state government than it does to the federal government. While the citizenry doesn't pay enough attention to the national government, they watch Washington more closely than they watch their state capitals. The federal congress is much more transparent and gets greater media coverage. These factors combined make it easier for lobbyists (of all kinds) to get what they want from the states.

-Laelth


Edit:Laelth--clarity and spelling.

[SemperEadem]

69. dupe

[420inTN]

83. If you don't read any contract you sign you are an idiot.

I went to the hospital a few weeks ago to get an x-ray. The admissions clerk was surprised that I actually read the four pages of disclosures and indemnities before I signed them.

When you sign a contract, you are agreeing to the terms of the contract. That's why it is in writing, and you sign it. If you don't know what those terms actually are, you may be in for a nasty surprise later.

"Well, I didn't know," or, "Well, I thought..." is no excuse if what you want covered is not specifically covered.

If you bought a car, and the dealer came back later and wanted you to pay an extra $2000 for it than what was on the loan/purchase agreement, would you give it to them?

[Laelth]

86. LOL

Thanks for the advice. I'm sure it was well-intended.

But, no. I'm too busy to read every contract I sign, and I'm not rich enough to hire an attorney to read every one that's handed to me. And that's my point. Where there's unequal bargaining power, the courts can (and sometimes do) interpret the contract against the powerful party that prepared it. If it were a truly bargained-for exchange, it would be different, but when a powerful entity like a hospital (an entity that has life-or-death power over its patients) prepares its own contracts and says, "Take it or leave it," that's a different matter. People who sign those contracts do so because they have no real choice. That kind of contract is not entitled, in my opinion, to the kind of deference that the Repuke party would like to give it.

-Laelth

[420inTN]

87. Re: "I'm too busy to read every contract I sign"

Well, good luck. I hope that you never get caught short from not reading one.

>> "People who sign those contracts do so because they have no real choice." <<

Sure, they do:
1) Sign the contract.
2) Don't sign the contract.

Also, in most areas (but not all), there are more than one insurance company offering coverage. If you don't like the policy/terms offerenc by A, go see what B has to offer.

If you think that the terms are not favorable, and you will be screwed, don't sign the contract, and save the money that you would put towards the premiums. As far as I've seen (ymmv), "No real choice" is rarely an option.

Why buy coverage, if nothing is covered?

edit: just for clarification, in my earlier post when I typed, "... you are an idiot" I was speaking in general, and not directly towards you or your situation(s).

[Laelth]

89. No offense taken.

Just out of curiosity, when you read that 4 page x-ray contract, what did you do? Did you bargain for different terms? Did you like everything in the contract and willingly agree? Or did you just grumble and sign anyway?

Usually when I read contracts, I grumble and sign anyway. That too is part of what I'm driving at. Why read the thing if you're just going to sign anyway? When I go to court to litigate a contract dispute, which argument do you think is more likely to convince the judge to rule for me? 1) "Yes, your honor, I read the contract very carefully, and I didn't like it, but I signed anyway?" or 2) "Your honor, I had no idea that was in the contract! I am outraged, and this isn't fair! I didn't feel like I had any choice but to sign!"

Take your pick.

-Laelth

[420inTN]

91. It wasn't a contract for the xrays

The four pages was for the general indemnity clauses, terms of admittance, recognizing my financial obligation to the hospital, etc.

However, if I thought that any of their terms was unreasonable, I would not have signed. If they said that they could not provide services if I didn't sign, I would have gone to another hospital.


>> "Usually when I read contracts, I grumble and sign anyway. That too is part of what I'm driving at. Why read the thing if you're just going to sign anyway?" <<

1) Just because that is your situation and response, doesn't mean that it is the same for everyone.
2) Just because you don't like the terms of the contract, doesn't mean that you have to sign. By signing, you are agreeing to the terms, even the ones you may not like.
3) Depending upon the contract/situation some clauses may be removed or negotiated.

If I have a gunshot wound and am trying to be admitted into the hospital, I will probably sign unread whatever they put in front of me. However, If I am having work done to my house, or am signing an employment contract, I'm certainly going to read the contracts and negotiate any terms I find unreasonable. If I find the terms totally unacceptable, I will not sign the contract and seek services elsewhere.

If it is an emergency situation, you can certainly sign the contract, and if things don't work to your satisfaction, try to argue later against the predatory terms of the contract in court.

It is perfectly reasonable if the disputed situation falls within a gray area, or is overly broad or vague in terms. However, if the contract specifically excludes XYZ, and XYZ happens... well, it's not covered.

edited for spelling, grammer, and clarification.

[NeoConsSuck]

51. I don't think the courts will buy it..

what caused the floods? A break in the levees. What caused the break? A runaway car? Faulty concrete?

Same for the fires. Would the fires have occurred without the hurricane?

Of course, I'm a layman, I'm just looking at it from my point of view.

[MercutioATC]

74. Try having water back up in your basement because of a storm.

Clearly, the water backed up because of the storm, but most homeowners' policies won't cover it.

[tsuki]

54. Flood damage was once when the waters rose, now it is if you

have water damage because your roof blew off.

[Abathar]

56. No, a quick rule of thumb

for water damage is that if the wind lets the water in you are covered, say a window gets blown out and the water comes in and ruins the walls or floor your golden. If you left the window open then you are not covered for the same damage. A roof blown off in a rain storm is no different than tornado damage, you will be covered.

[tsuki]

61. Check your Florida policy.

[salin]

28. given the quickness to try to loophole out of payouts

is there a point when we simply stop buying insurance and put the money aside instead? Granted we can't save at the rate for replacement ... but if we are not going to be able to recover any money from insurance anyhow... at least there would be some savings.

Perhaps the idea of insurance - when it is no longer insurance (as in NOT paying out) is, due to corporate greed, obsolete. I don't know what the alternative would be - but perhaps it is in societies interest to find some alternatives.

[defiant1]

66. You hit that on the head....

Greedy bastards!!

[notadmblnd]

3. looks like bush just made himself another mess o' poor people

for hm and his family to hate. How you like him now Mepubs?

it also explains all the fires in NO.

[Blue_Tires]

4. kicked/nominated

you mean the insurance companies take the $$$$ but don't give it back when it's actually needed? i'm shocked!

[bluedeminredstate]

5. Do floods

often make structures look like piles of matchsticks that were blown up? Just asking.

:shrug:

[Lochloosa]

21. In a storm surge...yes...

[oda]

6. hey?

If the levee did not break would the damage strictly be from a hurricane yes or no?

Would it not appear that the only reason the levee did break was directly because of the hurricane.

hur·ri·cane
http://dictionary.reference.com/search?q=hurricane
n.

1. A severe tropical cyclone originating in the equatorial regions of the Atlantic Ocean or Caribbean Sea or eastern regions of the Pacific Ocean, traveling north, northwest, or northeast from its point of origin, and usually involving heavy rains.

It is pretty obvious that rains strong enough to break a levee would not just be some random occurance, it happened directly because of the hurricane.

More than half of the properties in the city are understood to be insured only for hurricane damage, with insurers insisting that it was a flood that forced the evacuation of the city.

Wheres the logic?


A Million People BUTTFUCKED by a Technicality :\

[blue neen]

10. Unfortunately, there is no logic.

We were flooded in this area of Western PA last year by Hurricane Ivan.
Our neighbors' family room and garage were flooded because a storm drain was clogged so the diverted water ran straight into their house.

The insurance company told them to take a hike.

If you had a car in the city of New Orleans that was damaged by the flood, it WILL be covered by insurance.

Logic? No frikkin way.

[lynne]

15. The car will be covered for flood and water damage -

- only if "Comprehensive" coverage is on the vehicle. The same thing for any wind or falling objects that may have damaged the vehicle.

Normally, comprehensive coverage is written on newer vehicles that also have collision coverage. Anyone with just liability coverage will not be insured for any type of damage to their vehicle.

[blue neen]

39. This once again will hit the people who can least afford it the hardest.

If they had older vehicles, they were probably carrying the minimum insurance that the law allows.

It all just stinks.

[Abathar]

57. Do you think we should all pay more

for our insurance so that someone who got the very minimum allowed to drive a car should get it replaced? They pay $200 a year, I pay $1000 but they should be allowed the same coverage?

[blue neen]

93. No, I didn't suggest that at all.

My point is that for the poor people, if they were lucky enough to have a car, it probably was not a new vehicle or valuable vehicle. Therefore, they would probably only carry liability on the car. If the car got wiped out in the flood, they will get nothing for their car.

So, they start out poor and get poorer. No house, no car, no clothes, no belongings. That bothers me from a compassion standpoint, but I'm not suggesting that they should get the same coverage for less money.

What does bother me is this: For the rich people who build homes along the Gulf coasts, coastal areas in FL, the Outer Banks of NC, etc., our insurance dollars do go to help replace those homes. Oh yeah, they pay premiums, but in an event like the 4 hurricanes that hit Florida last year, EVERYONE's premiums went up to cover the losses the insurance companies paid out there. Not just Florida homeowner's premiums, everyone's homeowner premiums went up to pay for those storms.

[Name removed]

12. Deleted message

Message removed by moderator. Click here to review the message board rules.

[oneold1-4u]

29. The "time it takes"

Theoretically only. I have a few million in high yield securities or even in the bank. Each day that I put off payment to you for debt, or even phone bill, I will gain that amount in interest and royalties and probably more. You and the phone company only get paid when it is REALLY necessary! The average working person pays from monthly earnings. The "rich" also pay from earnings but never have to work!

[serryjw]

7. IF a house is not standing

that was the hurricane. If they is water damage then they have a problem and I'm not sure what could be done. Personally, I wish some high powered law firm would sue the Federal government for not fixing the leeves.

[Sgent]

8. My grandparents lost their house...

Most likely there was little to no hurricane damage other than roof. However, they lived 1 block south of where they 17th St Canal broke. They literrally had a waterfall hit their house -- and its no longer there even if ruined. Since they were out of town when it hit, a lifetimes worth of pictures and art, furniture and personal items are gone.

Of course, they had no flood insurance (owned it outright). So now they have been left with no house and not enough to rebuild it -- they are in their 90's.

We are fortunate in that their sons can afford to take care of them, but so many others won't be.

:cry:

[barb162]

42. I am very sorry. I think the experience of your gransparents will

be a very typical and sad one for many NOLA homeowners. Again, I am very very sorry.

[ShockediSay]

11. It's the insurance companies, stupid n/t

[Gman]

19. Insurance is gambling and insurance companies are "the house"

Insurance is the only gambling scheme in the country that wiggles, whines and tries to get out of paying when it loses.

[catmandu57]

20. GODDAMN RAT BASTARD WEASEL EXTORTINISTS

I FUCKING HATE INSURANCE COMPANIES.

[Celebration]

22. All true

And here is what happens when coastal property is destroyed-- the insurance company covering hurricane says it was the storm surge (flooding) that does the damage, and the insurance company covering the flooding blames the wind.

INSTANT LAWSUIT!! This has happened all over Florida in past hurricanes.

[emad]

23. UK insurers facing meltdown

Fears grow for Katrina insurers

FSA raises spectre of 'systemic risk'

Richard Wachman, city editor
Sunday September 11, 2005
The Observer


The Financial Services Authority has launched an inquiry into the effects of Hurricane Katrina on insurers as fears grow that a number face financial collapse.

Industry sources say that underwriters are expecting the biggest hit in history, far exceeding the $32 billion cost of the 9/11 terrorist attacks.

Several insurance syndicates operating in the Lloyd's of London insurance market are understood to have been badly affected, as well as a number of UK-registered groups based in Bermuda.

The FSA has written to insurers and reinsurers - groups which take on underwriting risks from primary insurers - asking for information about their liabilities and about the likely impact of Katrina on their solvency ratios - key measures which determine an insurer's ability to meet its obligations.

The letters, leaked to The Observer, show the FSA has acted swiftly to ensure there is 'no systemic risk' to the smooth operation of the industry following the hurricane.

http://observer.guardian.co.uk/business/story/0,6903,1567082,00.html

[Scout1071]

24. We need to find out which companies won't pay and enact a boycott.

I would drop any of those companies in a heartbeat.

[IndianaGreen]

26. What did you really expect from the capitalist system, justice?

The reason insurance companies exist is for them to enrich themselves from the inflated premiums they charge the people they insure. Once a catastrophe strikes, the insurance companies will protect their stockholders by finding reasons for not paying the losses.

According to them, much of the damage was caused by flooding, not by the hurricane. Never mind that what they call "flooding" was caused by Katrina's tidal surge which in turn may the levees fail in New Orleans.

You want capitalism? Bend over because here it comes again (BOHICA)!

[oneold1-4u]

25. They pay-you pay!

Those who could afford insurance will collect billions on everything! Their homes and vehicles may never have been touched by the storm or flooding, but you understand, there was theft and vandalism. Even some of those sent to find people and bodies were caught pilfering, so of course missing limousines, diamonds, and art pieces are expected to be missing.
Anyone who has had any opportunity to learn about insurance knows that all the companies have a fund for paying out in cases of great loss. Each time this fund is used, EVERY TYPE of insurance is increased! It may seem minimal to most individuals, only a few dollars on the next premium, but in perspective, multiply that by the hundreds of millions of policies in effect for all americans.
The ridiculous, will be the government, implementing more taxes, saying that the insurance companies can't afford the claims! haha

[oneold1-4u]

30. They don't enable

policyholders in proof of loss ever!
A man, covered by accident policy, falls into swift river from capsized boat. He attempts to save his son and self and has a heart attack. The company refuses to pay. (heart attack not covered)The medical examiner at autopsy, certifies on death certificate that cause of death was drowning since lungs were filled with water. That was logical since not all heart attacks cause death and man may have lived if not drowned in river. They had to pay!
The refusal of thousands of policies gains multi billions because people believe the insurance company's refusals! Insurance sales and policies are the greatest fraud on the people, other than the governments, and GOVERNMENT IS THE ONLY CONTROL OF INSURANCE.
When the dreams turn into nightmares, WAKE UP!

[BooScout]

47. They should have paid whether he drowned or not....

If the boat capsized and the man fell into the river and the shock of the fall into the water caused him to have a heart attack the claim still would have been payable. This is known as Accidental Means and is the definitive for most Accidental Life policies.

It will boil down to what the death certificate and autopsy (if one was done) says.

Any company that refused to pay based on the situation you described leaves itself open to an Insurance Commissioner's complaint, possible fines and a lawsuit. If enough complaints are received and deemed to be true by an State Insurance Commissioner the Insurer's license to sell in that particular state can be yanked. The industry is regulated.

[mbperrin]

59. "The industry is regulated" - in Texas, we have regulatory

capture. Even in a simple fender-bender, you'll need to sue your insurer, and the odds, in my personal experience over 37 years and 4 accidents, are exactly 50-50. In all 4 cases, the other person was cited at fault, and I was covered by "comprehensive" insurance. Twice the company paid, and twice not, but I had to sue all 4 times.

Always interesting how the "exclusions" are longer than the inclusions, isn't it? And those commercials with all the smiling adjusters never actually mention any of this, right?

As my dad said, there's never been an insurance company in a short building, and there's a reason for that. There's also a reason why no major insurer has failed in the last century in Texas. it's just like the Roach Motel - your money goes in, it doesn't come out.

It's a game, and the game is fixed. The only thing "special" about exclusions is that these are things that actually happen, rather than the long list of "improbable" events where you're actually covered.

And as for your homeowners, all the time that your roof is depreciating so that they will pay nothing regardless of cause when the time comes, your premiums don't depreciate, do they?

There's a reason insurance companies get laws passed to require you to buy their products - in a free market, no one would pay money in for nothing! They use the force of law to take your money - far more effective than a pistol, and perfectly LEGAL!

Sure do hope there IS a burning hell, just like they told me when I was a little kid.....

[genieroze]

32. If there wasn't a hurricane there wouldn't be flooding.

[katinmn]

34. Then they shouldn't take their money!

[0007]

36. The biggest snakes in the world are the Insurance Companies.

[yorgatron]

38. you can say that again!

[NYC]

90. Well done, yorgatron.

That was hilarious. :hi:

[0007]

37. The biggest snakes in the world are the insurance companies.

[barb162]

41. I suspect a lot of the homes hardest hit had no insurance at all

I suspect those homes were passed down from one generation to the next and were not under mortgage (and therfore not required to have any insurance , let alone flood coverage). It will be a real disastere for the people who owned those homes.

[BiggJawn]

43. "In other Business News, State Farm breaks ground on new World HQ..."

Even if they DID insure against floods, they'd still be trying to weasel out of paying...

"So if Mr. Goodwrench was a tool, what kind of tool would he be?"

"Uh...A WRENCH?"

"Oooh, sorry....MITER BOX is what I was thinking of...."

Hey, when you hold the rulebook, you get to change it whenever and however you want to.

[freemen2005]

44. CONTRACTUAL OBLIGATIONS

if they dont follow through with their end of the bargain, then why have insurance? If they dont pay up then everyone will see it for the scam that it is.

[Chicago Democrat]

46. You have our special "no claim" clause which specifically excepts

the insurer from any and all claims.

[The Magistrate]

50. These People Are Pigs, Mr. Pilgrim

In a friendly game of cards, you can get ribs broken for this kind of behavior, and properly so. Insurance is a bet, by the company that something will not happen, and by the client that it will: a man should pay up when he loses a wager....

[daleo]

52. I wonder how the lack of autopsies will play into this?

No autopsy,
therefore no confirmation of cause of death,
therefore no decision that "hurricane caused death",
therefore no insurance payout.

[lynne]

53. Life insurance claims aren't so much the problem -

- as either you're dead or you're not. The only qualifier would be if suicide was committed within a specific period during the policy term or if the insured died of a pre-excluded, pre-existing condition.

The great confusion will be with property claims and which carrier - homeowners, flood or wind (if applicable) - is responsible for the claim.

[Nihil]

58. Er, not so fast with that one?

Given the "flexible accounting" approach to the body count, I think
that insurance companies will definitely be dragging their heels about
paying out on life insurance claims in NO ...

You have families split up across the country.
You have total loss of documentation.
You have a serious lack of traceability.

Do you think that insurance companies (spit!) are going to suddenly
go all compassionate and give a claimant the benefit of the doubt?

[lynne]

60. They will obviously only pay to the beneficiary -

- where ever they may be. The beneficiary will have to file the claim and will have to provide a death certificate to do so. That, in and of itself, will take time.

No, insurance companies will never give any claimant the benefit of the doubt nor should they. Fraud is rampant everywhere and if you were the beneficiary you would want to make sure your funds were protected and handled in a legal and professional manner so that YOU actually received them and not someone who ransacked your father's home and found his insurance information.

A death certificate will be required and the beneficiary will need to prove they are who they say they are. Given that people are all over the country, that will take time. Records and documentation are lost but the companies records are within their databases. The trick will be for beneficiaries to figure out who their loved one had their insurance with so that they can begin the claims process.

However, making sure that the insured is actually dead and that the beneficiary is who they say they are is not indicative of "weaseling" out of paying a claim. It is making sure that the insureds intention is followed and that the loved one that was to receive the funds is the person who actually gets it.

This is going to take a long time. No one should have ever believed those commercials where the adjuster was writing a check at the scene of the loss 30 minutes after it occurred. Wish it were so but its just physically impossible.

[Nihil]

70. Ok, so maybe I'm just misunderstanding something here ...?

My previous post might not have been clear.

As people have been split up and shipped around the country, there will
be an immediate difficulty in asserting whether someone is "simply"
missing or is in fact dead.

In addition - according to my understanding - a death certificate
can only be issued once a body has been found, identified and assigned
a cause of death.

This means that there will be a HUGE grey area with the survivors on
one side claiming that X died in New Orleans arguing with the lawyers
of the insurance company who simply sit back, twiddling their thumbs,
saying "Prove it!".

Claiming that a house has been flooded, lost a roof (or whatever) is
far easier than the above - it only requires proof of domicile/ownership
at that time and a visit to the location - hence my comment.

[lynne]

71. Sorry, I may have misunderstood your question -

- The state is normally responsible for the issuance of Death Certificates. The state Dept. of Health is the one that issues them in my state.

I'm sure each state has a statute somewhere to determine how and when a missing person is determined deceased so that a death certificate can be issued. Normally it's a matter of time - such as if your husband disappeared and you've not seen him in ? years and his social security has not been used nor have any of his credit cards, etc.

BUT - I would think (don't know for sure) that if witnesses could testify that they last saw Uncle Fred floating downsteam atop a roof or in some other life-threatening circumstance, that the time factor could be waived and the death certificate issued as the individual could be presumed deceased.

Each state may have their own particular set of rules and regs on the matter. BUT, you are right, the insurance companies will not pay a death claim until such time as a death certificate is issued by whatever means.

[blindpig]

62. insurance is a racket

when practiced by racketeers. Federal Flood Insurance, when applied to new construction for the benefit of developers, has been responsible for ecological damage of epic proportions, with other chickens coming home to roost when the "big one" comes.

[leesa]

63. They're more than willing to collect the premiums though.

[JPZenger]

64. Many Policies Also Don't Cover "Wind Driven Rain"

Many home insurance policies also don't cover "wind driven rain."

[lynne]

72. "Wind Driven Rain" -

- is rain that is driven into your home through an open window, door, attic opening, ventilation system, etc. WITHOUT any covered loss to the dwelling itself. Example: You went on vacation and left your house windows cracked and come home to a ruined carpet where the rain got in through the window. Not Covered.

However, if the rain/water entered your house as a result of a covered loss, then the subsequent rain damage would be covered. Example: Limb hit roof, causing hole or wind blew roof off house and rain entered afterwards.

[lakeguy]

67. BS! that's all i gotta say...

[Coventina]

73. Time to sue for bad faith.

It was a flood caused by the hurricane, dammit.

Give those people their money!!!
Why else have insurance?

[MrTriumph]

75. U.S. Senator Mary Landrieu, D-La., called them 2 separate events

Two weeks ago on Larry King's TV program Senator Mary Landrieu strongly and clearly stated NO suffered from a hurricane and a separate disaster, the failure of the levees.

Remembering the controversy between the owner of the Twin Towers and insurers (was it one attack or two?) I thought her statement and the emphasis she used (it was about the first thing she said when the program started) had significance. You don't think she's carrying water for the insurers do you? Hmmm.

[lynne]

76. She is correct -

- and insurance claims are settled "per occurrence". In this instance, there were two separate occurrences on two different dates. The hurricane and the damage it caused and the flood and its damage caused by the levee burst.

The damage caused by the flood will be excluded by all but flood policies. Some will have a homeowners or property policy which will pay for damage caused by the hurricane and also have a separate flood policy for the flood damage. As they are two different policies written by two different companies, the appropriate "per occurrence" deductible will be taken from each.

[MrTriumph]

82. Thanks for assisting with an explanation

Lynne- Thanks for the post.

[TexasBushwhacker]

77. If you live in the 100 year flood plain ...

and you have a mortgage, your lender will require that you have flood insurance. I would imagine that most, if not all, of NOLA is in a 100 year flood plain, so that means the people that are really screwed are the ones who own their homes outright and don't have flood insurance and the ones who were renters.

That being said, there are relatively few homes in the US that are built in a 100 year flood plain. If you live in a low to moderate risk area, flood insurance is only $200 to $300 a year - a relative bargain. If you live in a flood plain though, it's about $1200 per year for $150K of coverage. I looked at a house recently that was in a flood plain (and it was so cheap!) and when I found out the cost of the insurance, I said NO WAY.

If you think that this is unfair, consider that you aren't covered for earthquake damage to your house either, unless you pay for that kind of insurance. Should everyone have to pay for earthquake coverage when the only states that ever have earthquake damage are on the west coast?

[Endangered Specie]

78. Hmmm, reminds me of a similiar problem in the 1940's...

Insurance companies are the same all over the world.

[Deja Q]

79. Uh, don't people buy insurance in case of emergencies? Otherwise,

why bother paying for it?

I may as well give some jerk in a suit $200 every month then.

Sad. Seems like all of those people will have done that should the "courts" side with the insurance companies.

Very unchristian on the part of the insurance industry...

Sorry, a HURRICANE caused the damage. The flood was caused by the hurricane. Not God sneezing or Satan taking a piss or Zues throwing a big-ass boulder into the gulf. No. It was a hurricane that swept through the land, leaving a shitload of water in its wake.

Still, if they're going to mince words, maybe the insurance payers should as well? They bought in good FAITH. (whoa, FAITH...)

[librechik]

81. what the hell is a million times a million???

average payout for WTC survivors: $1.5 M.

hell!

[420inTN]

85. One trillion dollars. n/t

[KamaAina]

84. The exact opposite of what they did after 9/11

Then, they claimed that the two plane crashes into the two towers were really one attack, so they would only be on the hook for one claim. They were eventually slapped down in court.

Now, they're claiming that one storm somehow caused two events: the hurricane itself, then the flood, which magically appeared just a few hours later, with absolutely no help whatsoever from the hurricane. :sarcasm:

Reminds me of what a friend used to say about the insurance industry: "You've got peace of mind! We're not actually going to pay you anything if something bad happens to you, but in the meantime, you've got peace of mind!" :grr:

edit: header

[Tight_rope]

88. Well...It's the just the rich fucking the poor again...nothing new!...n/t

[cyr330]

92. Guess who the courts will side with?

Is it really any secret that our courts will side with the corporate interests? Those people in New Orleans are FUCKED.

I lived in New Orleans for 7 years and bought a house there. I was required to pay for additional flood insurance, because my house was in what they called a "flood zone." Although I understand that that particular neighborhood miraculously did not flood. It's hard to imagine how they can separate "hurricane damage" from "flood damage" when the two are completely intertwined.

[Sgent]

94. IMHO

The feds in concert with the state insurance commissioners should get out of writing flood policieis (all flood policies in US are written by feds).

Instead, the fed should act as a reinsurer, and floods should be added to standard perils of all insurance forms.

[lynne]

95. Several national insurance companies sell Flood Insurance -

- State Farm, Allstate, Travelers amongst them. FEMA does set the rates but you can purchase flood insurance through a regular insurance company and not have to go through FEMA's National Flood Insurance Program.

More info about purchasing flood coverage can be found here:
http://info.insure.com/home/flood/

[Sgent]

96. Not true

All flood insurance in the US is NFIP.

The companies (Allstate, State Farm, etc) sell the NFIP program, and earn a commission on the sales and adjucation of claims, but make no mistake -- they are all the exact same relatively crappy policy, and all decisions are made by FEMA. In fact, afer Andrew there were thousands of suites between companies FEMA about various aspects where FEMA disagreed with their adjucation and refused to pay them.

I should mention that there are some non-admitted specialty line insurers (think Lloyd's of London) that will write insurance for buildings in communities where the NFIP doesn't operate, or for amounts larger than the NFIP allows (but you must take the max NFIP first).

[lynne]

97. My point was -

- and possibly I did not make it clear - that you can purchase flood insurance through someone other than NFIP and that the servicing of the policy would be handled by that agent. Yes, the coverage and policy provisions are the same.

Travelers carries my personal homeowners. If I were required to have flood insurance, I would much rather deal with my Travelers agent than with NFIP direct.

[Sgent]

98. Ahh....

Yes, I agree with you on that. In fact, relatively few NFIP policies are directly written by NFIP since they don't really have the infastructure setup to sell and service claims -- whereas Travlers does.

What I was saying in my earlier message, is that I would like to see them revamp the entire theory behind flood insurance. Instead of having a separate policy, make it an insured peril on all homeowners policies. There would have to be a stop-loss provision however allowing losses over a certain amount to be covered by the federal government (instead of all losses as the case is now).

There would also have to be some regulations insuring that insurance is available everywhere it is currently (although higher prices might be applicable based on projected losses).

This would insure that people like my grandparents (see much earlier post), would have flood insurance. It would also eliminated the whole "windstorm or flood" question, etc.