Posted on 09/11/2005 10:22:33 AM PDT by WestTexasWend
OCEAN SPRINGS, Mississippi (Reuters) - The survivors of Hurricane Katrina, whose bludgeoned houses litter the U.S. Gulf Coast, are gearing up for another epic battle, this time against their insurers.
Almost two weeks after the killer storm swept ashore, homeless residents are only now beginning to contact their insurance companies, and they do not like what they hear.
The problem is that when Katrina came ashore in Mississippi state, which lies just east of Louisiana and devastated New Orleans, it brought with it a record storm surge that appeared to do much of the damage, leveling entire communities.
Initial comments from the insurance firms indicate that they believe this constitutes flood damage, which they do not pay out for. Standard homeowner policies only talk about wind, hail and rain, while flooding is covered by an optional government program, at additional cost.
"The pitiful thing here is that insurance companies are trying to stiff us," said Eve Jaspers, a Mississippi deputy sheriff, who didn't buy flood cover because her house was built on high land and touted by the estate agents as "flood safe."
"They're telling me this was flood damage," she says surveying the gutted shell of her one-story house. "The walls fell out. The front door is in the garage, God knows where the garage door is. It was clearly a small tornado."
The Federal Emergency Management Agency estimates only 40 percent of those hit by Katrina had flood insurance, including the hundreds of thousands from sodden New Orleans.
That means many people will not have the means to rebuild their ruined homes and risk bankruptcy.
CLASS ACTION CASES
Bands of survivors are already joining forces and considering bringing class action cases against the insurers unless they offer full compensation for a disaster that the locals say was triggered by the ferocious winds.
"Repeat after me: 'Wind driven storm surge'," says a lawyer addressing one group of mainly elderly evacuees who have sought shelter in Ocean Spring's Gulf Hills Hotel, Mississippi. They shout back the phrase lustily.
"Them insurance men is as crooked as a barrel of snakes, but you can fight them," said Clyda Campbell, a 77-year-old, roofless widow.
"We're going to have to study this and do what they did with the tobacco industry," she added, referring to the multimillion-dollar lawsuits brought over smoking-related illness.
The full extent of the damage caused by Katrina is not yet clear, but one catastrophe risk modeler has estimated insured losses could be between $40 billion and $60 billion, while uninsured losses could be at least that much again.
Even those people who did take out flood insurance are girding themselves for legal action, saying flood cover alone will not be enough to pay for the damage.
The government flood program pays up to $250,000 for residences, but many beachfront properties turned to a heap of matchsticks by Katrina, were worth much more than that.
"If we pull all the elements of our policy together, then we will be able to rebuild our house as it was, but they have to accept there was both flooding and wind," says Joel Knight, a well-to-do Ocean Springs doctor.
One third of his sea-view property has simply vanished, while the remaining two thirds is unsound and will have to be torn down.
As he waits for the insurance check, he will have to continue paying the mortgage on his nonexistent house to stop the bank from repossessing the land.
But he admits he is lucky. He is well off and can afford a long legal fight, if that's what it takes.
"Those who haven't got the economic means to weather the aftermath of this storm are going to have to settle real quick because they'll be desperate. Those who can hold out for longer will get better deals," he says.
"It's not fair, but that's how it is."
Hehehehehehe.....
In Florida one of the common practices of the insurance industry was to calculate depreciation into the replacement value of a home's loss. This was seen especially with roof loss claims. Lets say it would cost you $8,000.00 to replace the roof. The insurance company says sorry your roof was a 11 year old roof it was only worth $2,000.00 so here is your check and good riddance. Never mind that you could not replace your roof with the same materials and/or methods of construction because of new codes and increased construction costs. Never mind the premiums you had paid out year after year. That is just one example of the tactics and delays by the insurance companies. They cry poor mouth but never mention all the decades of not having to pay out claims. Where did that money go?
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