Posted on 02/23/2007 4:30:45 AM PST by PolishProud
One big question when Democrats took over Congress was which industry would be first to feel the new majority's populist rage. Oil? Pharma? Banks? Corporate America just got its answer, direct from the angriest man to have been empowered in the past election: Republican Sen. Trent Lott. Like many Gulf Coast residents, Mr. Lott was soon reminded by his insurer, State Farm, that his policy only covered wind damage--not flood damage.
(Excerpt) Read more at opinionjournal.com ...
I had damage as well, but did not file a claim on insurance, instead paid for the repairs out of pocket. My insurance cancelled me anyway, simply because I lived in one of the 6 coastal counties.
I was amazed by the people on this website who talked about how stupid it was to live on the coast. Yet, these same people love free markets and free trade. All those clothes people buy at Wal-Mart come from China. Now, how do you suppose these free trade goods from overseas get to the Wal-Marts in the Mid-West? They don't fly them in and dump them out in the Plains. They come in by ship, to the Coast. Then they are disttributed by train, truck,e tc. from the Coast. Someone has to work at the shipyards, CSX, etc. Now if everyone moved from the Coast as some recommend, who in the h*** are gonna keep these cheap shirts from China in the stores we all love to shop in?
The fact of the matter is this; there is nowhere in this country that you can live that isn't vunerable to some type of natural disaster. And if youv'e been paying insurance all your adult life on your home, and your insurance decides to find a loop hole so as to not pay up, then you'll have the same opinion of those down on the Coast who got screwed. Think of the recent ice storms in Missouri. how many came on Free Republic and said, Oh well, you shouldn't live in Missouri.
He should be paid by Allstate for his wind damage. That is what he paid insurance for.
Not neccessarily. I have a friend who lived in Ocean Springs who had flood and homeowners. The flood insurance only paid her $6000 on a $100,000 house because they determined that only $6000 worth of damage was caused by flood. Then she had to seperately fight with her homeowners insurance, who wanted to only give $15,000 because they only considered that much damage was caused by wind. Her insurance companies didn't agree, and her family got screwed by both.
I'm not saying the insurance companies can do no wrong. Of course they can. I'm just saying that Trent Lott's insurance company paid him in full. His problem is that he did not carry enough insurance to cover his losses, and now wants to find the nearest convenient entity to cover the difference.
Also, I disagree that expecting your insurance to pay is somehow "whining to the government". If you have paid insurance on your home for years, which I'm sure you have, and you sustained damage and the insurance company wouldn't pay, you would take some type of recourse too.
I don't think any house, old or new, survived the 25-foot storm surge in Mississippi.
Of course storm surge is flooding. If not, the coast wouldn't be listed as a "flood zone", because it certainly isn't going to be inundated by rising waters from the river.
Houses were destroyed in a hurricane.
The insurance company has chosen, on its own, to call it all "flood damage". How do they know this? Wind certainly was also a part of the destruction.
Beyond that, what, precisely, is a flood? STORM damage is not a flood, unless its water rising from a river. Is a storm surge, which is wind-driven water, a flood?
The insurance company, on its own, has decided that it is, and that therefore they don't have to pay.
The insurance companies, on their own, have decided that all wind damage in the case of houses also destroyed by storm surges, will be disregarded completely, and that it's ALL flood damages.
Nice try. But the lawmakers may have a different view of the definitions of those words. The insurance company doesn't get to determine all on its own that 100% of destruction when there is a storm surge is caused by the surge. If the house was already ripped apart by wind damage, and wind-driven rain, and was THEN washed away by storm surge, the insurance company doesn't get to ignore the other two sources of damage and simply assert, for its own reasons, that 100% of the loss will be assigned to storm surge and 0% to the other factors.
Sure, they WANT to, and that is what the people with the legal power to define words: the legislators, are pounding down on their asses. Insurance companies think that they have the right to collect premiums but can be very, very particular about when they decide to pay out. They think their determination that 100% of damage is flood damage, and that wind and rain can be ignored because of flood damage, is the final word on the issue. They're wrong.
If this were the Mississippi River rising, it would be an easy case. That's a flood. However, if a tornado ripped apart the houses and the river flooded, the insurance company doesn't just get to set the rule on its own that the tornado and wind damage will be totally ignored and the loss entirely assigned to the flood. Sure, they can TRY, but it's no surprise, then, that the lawmakers reset the rules for them to make it fair for policyholders.
Likewise with a hurricane. Wind, rain, flying debris AND storm surge. It's nice that the insurance companies want to ignore the first three factors and assign everything to the catastrophic storm surge. It's nice that they want to call the storm surge a "flood" (is it?). It's nice that they want to hold the line and not even PARTIALLY compensate for wind and rain damage. But it's not going to work, because contracts are subject to law, and law is decided by politics, and people don't like insurance companies deciding all by themselves that they're going to define all storm damage as flood damage and not pay.
State Farm has already decided to get out of the insurance business in Alabama. Fine. Other companies will get the Alabama profits instead, and will set their premia accordingly. Or NO insurer will insure, and the government will do it instead.
The real bottom line is that if you collect billions in premia, when the time comes to pay, interpreting words to avoid payment is going to get you thrown into a skillet and fried like a catfish. The insurance companies needed to be a lot smarter here. SOME damage was attributable to wind and rain, and they should have made partial payments on all those policies. Calling everything flood damage is an exercise of power that invites a greater exercise of power to slap you down.
If an insurance company is not fulfilling their contract, of course the insured party should sue.
That is not what we are talking about here. NFIP paid in full. Lott is talking about retroactively rigging it so that another insurance company must pay for things they never insured against. It is two different issues.
Unless there is a specific written definition of flood that is part of any policy.
Wow, insurance must cost a lot per thousand covered where they live.
I collected a few years ago from hail damage, it was a minor cost relative to my house, less than 10% of the value.
That payout to me was more than the total money I had paid into all my homeowner's insurance during the 25 years I have owned a home.
It's hard to imagine paying so much for insurance that after 20 years you've paid more than it costs to replace your house. That would suggest to me that I'm living in the wrong place.
If Trent Lott has been paying allState insurance company to cover his house which at least up until Katrina hit included wind damage, then they should pay.
If a house loses some siding and shingles before it is washed out to sea, how is the wind damage relevant? The end result is an empty slab, because the flood has carried everything away. If the house was in pristine condition before the flood, the end result is the same.
Furthermore, even if the intermediate state of damage is considered at all important, there is the problem of assessing how much wind damage was done by the wind prior to the house being carried away. You're standing there looking at an empty slab. What happened just before the house was destroyed is speculation, in most cases.
But that is not what this case is about.
The problem here is that the NFIP payout is capped. Trent Lott and his ilk want to bust that cap to get their million dollar mansions paid for in full. They don't care who pays, as long as somebody pays. That is what is going on here.
Where did I say my parents home was replaced?
Sorry. AllState= State Farm
His house was not destroyed by wind. His house was destroyed by flood. The flood insurance paid in full.
I agree. If a tree was blown down or his roof blew off, he deserves compensation, but if his whole house was washed away in the storm surge, that is damage from a flood.
There is a reason why most islanders and other shore dwellers build with straw and palm leaves. :-))
I live in Ohio and purchased an earthquake rider.
the coast wouldn't be listed as a "flood zone",
Exactly how big is "the Coast"? Exactly how far inland is that? 2 miles,5,25? The area along Mississippi that was considered in the flood zone of the Coast has changed since Katrina, having been redefined by the insurance companies, simply because the wind-driven water went further inland that anyone could have possibly imagined. Many homes that sustained wind driven storm surge were not in a flood zone before Katrina, thereby not needing "flood insurance".Now, however, the insurance company is wanting to redefine where the flood zone is, retroactively. Again, I live in the county north of Jackson County, which is aproximately 35 miles inland. And yet my insurance company cancelled me because I now live in a Coastal county. There were homes as far north as Jackson that were damaged,and some insurance companies are not wanting to cover those, either. And they had no type of flooding whatsoever.
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