Posted on 09/15/2005 1:23:20 PM PDT by Altair333
BILOXI, Mississippi - Mississippi's attorney general on Thursday sued insurers to force them to pay flood damage from Hurricane Katrina, saying standard insurance polices have led homeowners to believe they are covered for all hurricane damage, whether from wind or flooding.
Attorney General Jim Hood asked the Hines County Chancery Court to void provisions in the policies that attempt to exclude from coverage losses or damages directly or indirectly caused by water, whether wind-driven or not. Those losses could reach into the billions of dollars.
Only about 3 in 10 houses in disaster-struck portions of Mississippi and Alabama had flood insurance, according to Federal Emergency Management Agency estimates.
Katrina destroyed more than 68,000 homes, apartments and condos in the state's six southernmost counties, and caused major damage to about 65,000, according to a preliminary survey by the American Red Cross. Many homes were destroyed by up-to-30-foot wall of water driven ashore by the hurricane's Category 4 winds.
"The residents and/or property owners of Mississippi Gulf Coast purchased these policies from defendants for the primary purpose of insuring against any damage that could possibly result from hurricanes originating from the Gulf of Mexico," Hood said in the complaint.
He said homeowners purchased the policies with the "reasonable expectation that these policies would provide such coverage."
Yeah, I seriously doubt there was any attempt by the policies to give the false impression they covered storm surge damage.
Well, this is the government ensuring a delay in getting this resolved.
Now everyone that ever had a loss in any past hurricane anywhere that wasn't covered for flood damage can go back and get their money from the insurance company. Start with Andrew, Hugo, and last year's four Florida hurricanes.
SUCKERS! You have been paying for insurance that now the MS State Attorney General wants to give to everyone FOR FREE!
I have no great love of insurance companies, which exist mainly to deny claims, but this is nuts. If Mississippi manages to redefine the terms of the policies post-facto, you aren't going to be able to get private coverage in the state in the future.
Ridiculous. The wording of those policies is all cleared with the state's insurance commissioner, who surely knows that Gulf Coast residents are in hurricane zones. Most homeowner policies clearly state that floods are NOT covered, and there are media stories all the time warning homeowners in flood zones to get flood insurance. Most mortgage lenders will not lend on a home without flood insurance if it is in a flood zone.
I don't see how they will succeed. Contract Law is fairly straight forward. The insurance companies have some of the best contract lawyers in the country. It is going to be hard for a 3rd party to void or ammend certain contract provisions. It is a very dangerous precedent.
There was one previous thread on this issue and you'd be surprised at the number of people trying to play verbal gymnastics and claim that since storm surge is DRIVEN by wind it should be considered "wind damage."
Even though the text of policies that people posted very explicitly excluded storm surge from being covered.
My question would be whether or not the policies even differentiate between "flooding" and "storm surge" in the definitions/exclusions language. I'm no insurance guru but I think it's likely these people believed they would be covered. Perhaps what's at issue is really misrepresentation, a legal argument in the contracts world.
The AG must be running for reelection. Otherwise, why would he float such a silly idea.
The US Supreme Court rarely gets involved in these state law issues, but I think they might reverse the Mississippi Supreme Court if they supported the AG on this.
The Mississippi Supreme Court has a conservative majority now, but the most conservative judge- Dickinson- is from the coast area and is an elected official. He may find it politically difficult to side with the insurers on this one.
Bet clintoon's ex-FEMA man now lobbyist for Allstate is looking at this real hard. See below:
Ex-FEMA chief Witt lobbies for insurance company
AP ^ | 9/15/05
Posted on 09/15/2005 10:01:00 AM PDT by Uncle Joe Cannon
Posted on Thu, Sep. 15, 2005
Ex-FEMA chief Witt lobbies for insurance
SHARON THEIMER
Associated Press
WASHINGTON - The former federal disaster chief hired by Louisiana to help lead its Hurricane Katrina recovery has registered to lobby for an insurance company that wants Congress to create a natural disaster "catastrophe fund."
Former Federal Emergency Management Agency director James Lee Witt and his firm, James Lee Witt Associates, registered Tuesday to lobby for Allstate Insurance Co. Their mission: "to draft and introduce model legislation creating a natural disaster catastrophe fund," says the registration, posted Thursday by the lobbying tracking service Political Money Line.
Witt's lobbying for the fund comes while he's on the payroll of the state of Louisiana. Gov. Kathleen Blanco hired him earlier this month as a consultant to advise her on the state's hurricane relief work.
Mindful of the potential appearance of a conflict of interest, Witt is turning away prospective clients who want him or his firm to lobby in Louisiana, and is refusing to do such work for existing clients, said Barry Scanlon, a firm partner and lobbyist.
"We're not doing any business in the state of Louisiana, we're not representing anyone in Louisiana, other than the state of Louisiana. That's where our loyalty lies," Scanlon said.
Though the registration was filed this week, the firm's work for Allstate began Aug. 1, nearly a month before the hurricane struck, Scanlon said.
Witt headed FEMA in the Clinton administration. His Washington firm lobbies on disaster issues for several clients and also serves as a consultant on disaster preparedness planning, training and assessments. Less than 5 percent of the firm's revenue comes from lobbying, said Scanlon, a special assistant to Witt while they were at FEMA.
Witt's experience at FEMA was among the reasons Allstate hired him, company spokesman Michael Trevino said.
"He's an expert," Trevino said.
Under the catastrophe fund proposal, insurers would cover homeowners' natural disaster-related claims up to a certain amount. The state affected by the disaster would cover claims over that amount up to a certain level, and the federal government would cover them beyond that.
This is the "Our residents are too stupid to know what they are doing" defense.
Makes as much sense as the "Chewbacca" defense.
Every year I get a mailing from my insurance company that contains a detailed description of what FLOOD insurance is, how flooding is NOT covered, and what is and is not covered. Along with a phone number I can call where my agent will be more than happy to go over any questions I have.
And I understand that if I lived in an area that would experience flooding, like along the coast line, I would also get yearly mailings from the United States Government explaining FLOOD insurance and telling me about my eligibility for relatively inexpensive government coverage, BECAUSE my private policy will not cover it. (AM I WRONG ABOUT THIS? DO PEOPLE IN FLOOD PLAINS NOT GET THESE MAILINGS?)
And taxpayers have a "reasonable expectation that government wouldn't devolve into a gaggle of useless parasites", too.
Sorry Charlie...
If you survived, you better hope your house was knocked down by the wind, and not the flood. The Wall Street Journal had a long article on a State Farm adjuster from Colorado giving people the bad news.
If the policies were sold under false pretenses.. which more than often they are when it comes to the topic of flooding.... that's fraud, and I have no problem if the AG goes after em for it.
Bingo! And how much do you want to bet this AG is a liberal?
This has nothing to do with 'victims', and everything to do with increasing the depth, breadth and reach of government....
I agree. We bought our house in an area not deemed a "flood zone". However, being blocks from the FL coast, we have been paying for flood insurance in case of a large storm for five years now. Is it too late to get my premiums back and just suck the goverment teet?
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