Posted on 09/21/2005 10:01:23 AM PDT by george76
I don't live in a flood plain, but I didn't think one could even get a mortgage on a property in a flood plain without flood insurance. I know I couldn't. I had to have a survey to prove that I wasn't in a flood plain. It might be a bit redundant, but you would have to be a fool to live in New Orleans, or along the Gulf Coast and not have flood insurance.
My 29-year-old son is a SSgt in the USAF stationed at Keesler AFB in Biloxi. He was born and raised in the DFW metroplex, where flooding is almost nonexistent. He and his wife were stationed at Keesler from 1996 to 2000 when Hurricane Georges hit. He was living in base housing and the only damage sustained was a downed tree. In August 2004, he was reassigned back to Keesler. In October 2004, he, his wife, and infant daughter bought their first home in the far NW section of Biloxi. At the time of closing, he called and asked our advice on what coverages he should have. At this time I should interject that we are an Allstate family - my father-in-law is a retired Allstate agent here in the Metroplex and we have had Allstate for the 33 years of our marriage. Our best advice was to absolutely carry hurricane coverage and discuss with his Allstate agent and mortgage company the other coverages they would suggest. Wells Fargo (the mortgage company) told him he did not need flood coverage as he was not in a flood plain. His Allstate agent told him he did not need flood coverage as he was not in a flood plain.
As my son was preparing for evacuation with Hurricane Dennis, he met with his insurance agent and asked if he was properly covered for any and all damage from a hurricane. He was told once again that he was covered for any damage to his house and contents and that he had nothing to worry about.
Katrina - he and his family were sheltered in the hospital on Keesler for this hurricane, as it was his "turn" to shelter as essential personnel. After 4 days in a hospital with no power and limited food (Keesler suffered massive damage to the base and the hospital was heavily damaged), he was allowed to survey the damage to his home. I received the tearful phone call that the house was still standing, but all inside was lost, due to at least 5' foot of water coming in the back door that was pushed open by what he assumed was high wind, due to the deadbolt having broken the door jamb with no exterior damage to it and a huge tree right outside this door having been literally pulled up the roots. I cried with him, thanked God that the three of them were safe, and assured him that everything else was just "stuff" that would be rebuilt and replaced by his insurance company.
The first indication of problems came the next day as he flew his wife and baby home to Texas, as there was no place for them to live. He contacted Allstate through one of the centers they had set up for advanced living expenses. His wife is a school teacher for Gulfport, gets paid once a month on the 1st, and their computer systems were down and checks not direct-deposited. His pay of the 1st had his house payment taken out. Money was non-existent. Allstate informed him that he did not have flood coverage and therefore no ALE.
The adjuster looked at the house on the 20th. He will be paid $500 to remove the tree from his backyard and replace only the section of fence where the tree fell. There was additional small damage to the roof and gutter. As for the interior of the house, his household contents, and the removal of the MASSIVE amount of debris in his front and back yard (a whole roof in his front yard and driveway, a boat in his back yard) will not be covered. This was all flood. The adjuster's suggestion - he qualifies for a SBA loan through FEMA to totally rebuild his house.
My son is not looking to the government to pay his loss. He is looking to Allstate to pay his loss. He relied on information from the "professionals" (his Allstate insurance agent) and was assured not once, but twice, that he was sufficiently covered should a hurricane hit that area. Is this an example of "good hands"?
I'm sorry for your son's loss, but what he is recounting is very standard for a mortgage closing.
If the home IS on a designated flood plain, the mortgage company is likely to require flood insurance or he wouldn't be able to get the mortgage. Outside of that flood plain it isn't required (i.e. you DON'T "need" it).
Same thing here. Our house is all brick and brick homes are particularly vulnerable to minor earthquakes that won't knock the house down, but will play merry he11 with the mortar. I don't live in an area deemed prone to earthquakes so it wasn't required insurance (and I chose not to get it). But it doesn't mean it couldn't happen. It means I considered it an acceptable risk.
Even the statement "you don't need flood coverage" (which I suspect is not exactly what was said) makes it clear that floods ARE covered separately. And it was therefore his option to pay a bundle for the coverage or not. There's no way you can take the statements of a mortgage or insurance company to mean they guarantee your will never get hit by a flood, only that the risk wasn't high enough for the mortgage company to REQUIRE the coverage.
Insurance companies have programs designed to determine what was damaged by wind vs. water. Usually it is pretty clear. If it is both, the homeowners policy will pay for the wind damage only and the flood coverage (if it exists) will pay for the water. It there is no way to separate the damage (wind vs. water), the ethical insurance companies (yes, there are some) will give the benefit of the doubt to the policyholder (as will the courts).
The definition of flood in both the NFIP Flood policy and the private homeowners policy includes storm surge in the definition of flood. The lawyers don't have a legal leg to stand on. The only thing they will do cause the insurance industry to spend a lot of money on the defense of this frivolous suit, which will ultimately raise insurance rates.
We'll see about that???? Although this suit may make it past the local level as a Mississippi jury will vote with the hearts and not their heads, this will never make it past the Appellate or the Supreme court levels. This is because the judges at these levels will have to rule on contract law and the intent of the the flood exclusion. Yes we feel terrible for the folks that aren't covered for flood, but they should take responsibility for not covering themselves. Why is everyone acting so entitled?? Please take responsibility for your choices in life!! There is no intent to cover flood (no matter what the cause) under a private homeowner policy- hence the need for the NFIP (National Flood Insurance Program). There are many reasons why we have the NFIP- one being Flood is too catastrophic for insurance companies to insure. No one could afford homeowner policies if flood coverage was provided. A good example of this is the separate wind policy sold by the state of Florida- too catastrophic for an insurance company to insure. This suit, if won by the plaintiff's, would be the worst thing for Mississippi, Louisiana and Alabama because insurance rates would skyrocket, and ultimately, most insurance companies would leave these states. Then what?? No one can force a private insurance company to sell in a state!
Allstate should not pay the flood victims.
Still Allstate sucks, always have, always will. I speak as a owner of a auto body shop.
Wait'll they discover the toxic mold exclusions most carriers adopted two years ago.
The people who didn't buy flood coverage should not have their claims paid. But as to your second part? Seeing all insurance companies go belly up would warm my heart very much indeed. I would love to see this nation rid of this extortion based business and once again the people and not the corporation have a say in our government. What am I saying and why? Simply this. Look at all the laws on the federal, state, and local level written since post WW2. You tell me who's monetary interest do they serve? Each time these extorting and down right in some case blackmailing thieves come up with a new coverage idea they run to lawmakers to have such need of coverage declared mandatory for all to purchase. Or any events that may effect their profit margin {seat belt laws etc} they again go to their bought and paid for lawmakers who are always more than eager to help their largest campaign donor.
I'd love to see them go belly up so such necessities of life as health care would be within the monetary reach of all persons. BTW do you oppose Socialized Medicine? Keep this fact in mind it was 500 lawyers and Insurance companies Hillary met with. Look at Medicare for example who now disperses the money? Who owns HMO's who BTW enjoy elevated favored and protected status in court by congressional decree?
While I do not agree with this lawsuit just seeing these companies sued for any reason warms my heart. There simply is no business with a higher level of corruption then insurance. How sad indeed that some think of these thugs as a part of the family and defend them no matter what they do. Some are willing as well to surrender such rights as privacy for their coverage.
Can anyone name me a business that has stripped away more of our freedoms and has taken over and micro-managed our lifes down to which type of car seat you must now use to take a child around the block in a car and never mind emergency situations where a person may not have such?
For example a grandchild gets sick at school and you need to pick him/her up? Look at how many grandkids you have. Look at their ages. Then look at the new requirements most states have for child car seats. Then look at who to thank for the never ending legal mess. Yet another profit loss prevention law written specifically for these extorters. It wasn't written for the childs saftey. The government could care less about any such interest. Look at everything single thing in your life they now control down to the local building codes.
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