Posted on 09/21/2005 10:01:23 AM PDT by george76
Insurer's operating chief responds to Mississippi suit...
Allstate Corp. won't pay flooding claims stemming from Hurricane Katrina, Chief Operating Officer Tom Wilson said on Tuesday, in a direct challenge to a lawsuit filed last week by Mississippi Attorney General Jim Hood.
Controversy has emerged surrounding the devastating flooding that followed the storm. Standard homeowners' insurance policies typically exclude flooding, partly because a national, government-run program covers those risks. However, many homeowners hit by Katrina may not have bought this extra coverage.
Mississippi's Hood sued Allstate and four other leading insurers in the state on Sept. 16, arguing that their flood exclusions should be voided and that they should pay flood claims.
"Exhibit one for us will be just the national flood-insurance programs -- advertising programs, which they put on very aggressively every year," he said. "People know this is a separate coverage, so we're not having many issues with our customers."
Allstate's Wilson did concede that there will be "issues" when assessing what damage was caused by wind and what was the result of flooding.
(Excerpt) Read more at marketwatch.com ...
Um, have you seen the government lately? Sooner or later the states were going to emulate the stupidity of the politicians in Washington.
Around this house, we refer to that as "the insurance wire shorting out." :-)
Hood names in the lawsuit Mississippi Farm Bureau Insurance, State Farm Fire and Casualty Co., Allstate Property and Casualty Insurance Co., United Services Automobile Association (USAA) and Nationwide Mutual Insurance Co.
Hood is asking a judge to restrain the insurance companies from denying coverage based on the water damage exemption. He said agents often failed to explain the exemption to policy buyers, who assumed they were covered for all damage caused by a hurricane.
******
Meanwhile, Richard "Dickie" Scruggs, brother-in-law of U.S. Sen. Trent Lott, R-Miss., and the architect of Big Tobacco litigation, said Thursday that he will sue insurance companies refusing to cover homeowners' losses.
Scruggs, now based in Oxford, has set up shop at the Scruggs Center, a mansion he renovated in downtown Moss Point.
Pascagoula Police Lt. Paul Leonard and his wife, Julie, are among Scruggs' clients. Nationwide Mutual Fire Insurance Co. has denied the Leonardes' insurance claim in writing. The letter adds, "It appears that your loss was caused by water or water-borne material."
Scruggs said, "This is typical of the letters and stories I've been hearing daily over here."
Public policy in Mississippi requires insurers to pay when any part of the damage is a covered loss. In this case, homeowner policies that cover damage caused by wind can't be denied when the damage involved wind-driven water, Scruggs said.
He said a homeowner has so far prevailed under this policy in a case on appeal to the Florida Supreme Court.
The insurance industry maintains Hood's legal action is doomed to fail.
Property insurance companies don't charge a premium for flood insurance and don't have the reserves to pay for flood damage, said Loretta Worters, vice president of the Insurance Information Institute, an industry trade association.
"Unfortunately," Worters said, "many residents chose not to purchase flood insurance."
The flood exemption has been part of homeowner policies since the National Flood Insurance Program's inception in 1968, she said.
"If there's going to be a change," Worters said, "you can't do it midstream."
Yup,I was "Jim F" and was one of the many who used to tangle with that smarmy Jack Gillis.
And,for the record,I still remember what "Texas Eagle" represents....a train and not a bird.How's that for a memory!
If this flies, it will set a precedent, and contract law in this country is dead.
Aren't you the dreamer. :-)
Heh, if I were to live in a 10' below sea level bowl right next to Hurricane Bay, my only question when getting insurance would be: Does this cover floods?
Idiots.
How do you seperate the water from a hurricane from the wind of a hurricane?
It is windSTORM insurance not just wind insurance.
When does the water cease to be "storm" and start to be "flood only"?
I can actually understand the bifurcation in NO because the flood was levy related more than "STORM" related.
That's interesting and makes sense on Allstates part. But i was referring to arson as a means of circumventing the "no flood coverage" clause.
And they would soon be bankrupt. Bad business practices are not good marketing. Allstate should meet it's contractual commitments - No more and no less (i.e. do not pay for flood damage if it is excluded)
And insurance will be so expensive no-one will be able to afford adequate coverage.
Absolutely. It would theorectically void every contract in this country.
My point was that there may be an opportunity here for Allstates competitors to gain new customers.
Those were the days. Do you remember Jim Craig? We corresponded via e-mail for years. I don't know what happened to him. I think he may have finally had a meltdown.
I left Rape-a-State a long time ago but I don't believe they should be held responsible for something that wasn't in the policy.
Read the fine print.
In front of a jury whose friends and families stand to gain from their verdict?
It's a homerun.
Oops. I'm wrong. Supposedly you are supposed to be in good hands with Allstate. (Although I know differently. )
Maybe that's why some of the houses had fires - some of those homeowners weren't so stupid.
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