Insurance industry response to Katrina (could be bad for Bush**co!)

[KamaAina]

The insurance industry is naturally going to minimize its losses, like the man said, "by any means necessary". Remember after 9/11 when the insurers of the WTC tried to define the plane strikes as a single event, so they would only be on the hook for half as much? Well...

http://slate.msn.com/id/2125758/

And in cases where they are explicitly on the hook, insurance companies can be counted on to resist—even in the most emotion-laden cases. After 9/11, when Larry Silverstein, who owned the lease on the Twin Towers, tried to collect on his insurance policy, insurers argued that the two attacks were a single event, thus capping the amount Silverstein could receive. Silverstein took them to court, and last December convinced a jury that the two plane crashes were two distinct events.

Something similar may be shaping up here. In its report, RMS noted that the destruction is tied to two distinct events: 1) Hurricane Katrina; and 2) "the Great New Orleans Flood which has resulted from failure of the levee systems that protect New Orleans." Expect plenty of insurers to argue that they'll be happy to pay for property damaged by the hurricane, but not for both the hurricane and the flooding, if individuals or businesses lacked flood insurance. According to RMS, "at least 50% of total economic loss is expected to come from flooding in New Orleans." Needless to say, the vast majority of those who have lost businesses and residences in the past week don't have Larry Silverstein's ability to litigate.

Here's the rub: The insurance companies' attempt to decouple the flood and the levee (actually floodwall) breach from the hurricane itself could lead to a most interesting discovery phase in which the Army Corps of Engineers' books are examined. Walter Maestri, Jefferson Parish emergency coordinator, has flat-out stated that he believes funds for levee maintenance were diverted to Iraq.

Hoo boy. Pass the popcorn... :popcorn:

edit: speling

[TahitiNut]

1. Watch for another insurance ompany bailout, using taxpayer funds.

As the insurance industry liquidates reserves to pay claims, they'll sell stock. Oops! We got a fire sale, folks. Almost literally. The "investor class" might like that - to a point. After they gorge themselves on the hedge side and on the bounce side, somebody has to pay the piper. Who? Taxpayers. Retirees. Then everyone paying for insurance, as premiums go up yet again. It'll be a fiasco.

[KamaAina]

4. Perfect! It's a win-win! (sarcasm)

The insurance company gets to avoid actually assuming any risk, and Bush**co avoids those potentially nasty disclosures about its utter dereliction of its duty to maintain the flood protection system.

One more and we've hit the trifecta! :sarcasm:

[eleny]

2. Read about the Parker firing

He headed the Corp for a heartbeat - until he balked at the drop in budget. Bush gave him the ax. An article was posted here last night but I can't search for it now. So here's the story at TPM
http://www.talkingpointsmemo.com/archives/week_2005_08_28.php

Scroll down midway.

[Just Me]

3. Why should they be concerned? Americans have been burdened,...

,...with financing United Corporations of America while the corporacrats get legal cover for their exploitation. :shrug: