Allstate won't pay Katrina flood claims

MarketWatch ^ | Sept. 20, 2005 | Alistair Barr

[TalonDJ]

They may take a big hit now but seems to me that would be made up by the influx of new customers.Yeah because I am sure that the country is full of people just waiting to pay more on their insurance so they can get that coverage.... riiiiight. Most of us don't live where it floods.

[Euphemy]

Bigdog said: Section 1. - LOSSES NOT INSURED

2 c. Water Damage, meaning
(1) flood, surface water, waves , tidal water, tsunami, seiche, overflow of a body of water, or spray from any of these, all whether driven by wind or not;

Well, the "all whether driven by wind or not" statement pretty much takes the wind out of my argument.

Still, in Mississippi, Insurance companies have to pay off the part of the coverage that *was* covered by their policies, so hopefully you guys don't have a problem with that.

[TalonDJ]

If the storm pushed the water into the house through the storm surge

No, because the policies specifically EXCLUDE water that is on the ground. If your roof leaks and rain damages something some policies will cover it. If that water hits the ground and THEN flows into your house then it is excluded. When a legal contract specifically excludes something that kind of trumps the 'sounds reasonable to me' conclusion.

[untrained skeptic]

"I dont think that insurance companies should have to pay for things they didn't cover, but I think if they sold a hurricane policy, they should pay for hurricane damage. And silly me, I think a hurricane wind driven wall of water is hurricane damage."

They sell coverage that covers wind damage. I don't believe it's specifically hurricane coverage, so I doubt that the flooding being due to a hurricane is significant as far as the claim is concerned.

Houses can be reasonably easily made to stand up to high winds of the levels experienced in hurricanes. They can be damaged by flying debris, but it's unlikely that many houses were simply blown away. I'm sure someone will find an example of a poorly made or poorly maintained house that was blown down, but most of the houses that get completely demolished are washed away by flood waters.

"Our designated flood plains are alongside rivers and bays, but the beaches are on the Gulf of Mexico. I've never in my lifetime heard of the Gulf of Mexico "flooding", have you?"

Yes. Hurricanes are a natural occurrence down there. I know that just like when I bough my house and had to have it verified that I wasn't in a flood plain, my parents in Florida had to have it verified that they weren't in danger of flooding from a hurricane where they live before they could get their mortgage without flood insurance.

Flooding from hurricanes isn't something that people there don't know is a risk. If they handle insurance there like they do in Ohio, you're definitely informed that your policy does not cover flooding and they are more than happy to clarify what that means if you have any questions.

People that don't get flood insurance in those areas are taking a risk that a big hurricane won't hit in their lifetimes. They guessed wrong, and didn't insure against the possibility.

It's not the insurance company's fault their home was damaged, nor is it their responsibility to cover the damage for something specifically excluded in the policy.

[Chances Are]

You know the standard line you get when the insurance company denies your claim:

"You may want to take this opportunity to upgrade your existing coverage."

CA....

[TalonDJ]

Any water damage is considered flood damage.

I know from experience that some policies cover rain water leaking through the roof. Even if you bungle the roofing your self when adding on to your house :P
If it has not hit the ground before it got in your house it is not flood damage. If it did hit the ground (or water on the ground) then it is flood water.

[TalonDJ]

they apparently don't care so much for your claims

They certainly don't care enough to pay for something they specifically state in the contract they will not pay for. Why should they?

[PoorMuttly]

"You're in YOUR hands with Allstate"

[flying Elvis]

Plus, if a home was severely damaged by the wind before the surge, does the insurance company refuse to pay anything, or will they determine how much the home was damaged before it was submerged? What do they do about a flooded home with the roof blown off? Or, how do they determine what their obligations are on buildings that were partially submerged, yet caught on fire? But if the fire was caused by floods, then what do they do? Lots of gray areas here for the lawyers to dance around in. I have mixed feelings for I trust neither insurance companies nor government.

[colorado tanker]

Yep, lawyers will definitely get some business out of this.

[Feiny]

ALLSTATE hates black people!

[RSmithOpt]

It's a shame that only the govs and insurance companies had the info about 50 yr, 100 yr, and 500 yr, flood plain elevations back in 1978.

Now you know what our tax dollars have been used for, then and now, to assist those in control of the big money.

Flood insurance coverage should be tax deductible!!

[FreedomCalls]

Allstate should pay, unless a rider specifically excludes 'wind driven water' or all water damage.

It does. Here's the wording from the ISO standard homeowners policy:

"Water damage. Water damage means flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind."

[FreedomCalls]

Our designated flood plains are alongside rivers and bays, but the beaches are on the Gulf of Mexico. I've never in my lifetime heard of the Gulf of Mexico "flooding", have you?

I have. Nearly every single hurricane floods with something called a "storm surge." It's why houses along the beach are usually built on stilts.

[isthisnickcool]

The "good hands people" like your premium payments, but they apparently don't care so much for your claims...

Mississippi, like most states "promulgates" the rates for property insurance and the policy forms. Which means that the state writes the policy. Not the insurer.

Except for rare exceptions ALL flood insurance is underwritten and the risk taken by FEMA/NFIP. Why? it's a suckers bet. By the way, just last week Congress on a voice vote allowed FEMA/NFIP to obtain BILLIONS from the US Treasury to pay flood insurance claims because the NO flood far exceeds any "reserves" for claims they have.

So, some Eskimo in Alaska will be paying for flood insurance claims in New Orleans. And, of course, this means that the premiums paid for flood insurance in New Orleans have always been subsidized by the US taxpayer and they always will be. FEMA actually has flood maps that show that parts of New Orleans will only flood once every 500 years! LOL! The whole federal flood insurance program for New Orleans is bogus. Without the feds writing flood insurance there nobody would loan money for mortgages.

Allstate does not have any Katrina flood claims because they never collected premiums for flood exposures nor had anything in the insurance policy that covered flood. A policy, again, that the state wrote and approved.

This is just politics. Moronic politics at that. The Mississippi attorney general ,ight as well argue that health insurance is included, dental, etc, etc. It makes about as much sense.

[Herakles]

That's even better! Thanks

[ladyinred]

So much for being in "good hands." Insurance is a scam.

[jess35]

You've just now come to that conclusion?

[CGASMIA68]

correct

[bigdog]

many millions will be paid