Big Surprise! Insurers Won't Pay!

Caught this off Raw Story.  I'm not a lawyer, but married to a good one.  Regardless, these people are getting shafted, as usual, and anyone who files lawsuits on their behalf will be stigmatized as ambulance chasers.  Blame the victims, and then blame their lawyers.

More below.

The insurance industry, for the last decade or so has stopped paying claims whenever they can get away with it.  They don't care if you've been paying your premium every month without fail.  They are looking for every single possible loophole out of paying you a cent.  It's true.  

Whether it's your own insurance or the other guy's, there are no more deals being made amicably.  Every single little case is going to arbitration or mediation instead of being settled.  So why should the industry roll over on paying out billions of dollars for Katrina?  The wind/surge/flood issue is murky enough without compounding it with the murkiness of whose responsibility it was to prevent or mitigate damages.

The only thing that's clear is that the little guy is being set up to lose, and his only defense is hiring a good attorney.

•  Well...

  ...they won't pay for flood damage if the person didn't have flood insurance.   I have a friend in Slidell and I talked to her while she was evacuated.  She was well aware that she was covered if her house was smashed by trees, but not insured if it was ruined by floodwaters.

  by BarbinMD on Fri Sep 09, 2005 at 11:59:07 PM PDT

  •  Insurance companies

    are going to try to say that the hurricane was one event, which would be covered, but the flooding caused by the storm surge was a separate event, which would not be covered.  They want it to be two separate events so that they can wiggle out of paying.  Is it one event or two?  Would a huge storm surge have swamped all those homes independent of Katrina, just on a whim of its own?

    by k2winters on Sat Sep 10, 2005 at 12:05:50 AM PDT

    •  Separate events

      I understand the concept quite well.  I'm talking about the fact that no one I know has flood insurance in the Slidell, New Orleans, areas...I lived there for seven years and still have many friends there.  So it doesn't matter if they're making them separate events, flooding isn't covered whether it's caused by a hurricane, a rising river, heavy rain or whatever.  No flood insurance means flooding isn't covered.

      by BarbinMD on Sat Sep 10, 2005 at 12:16:04 AM PDT

      •  Hmm,

        well, as a non-attorney, I'd guess those policies were pretty well written.  DISCLAIMER!

        Nonetheless, I'd advise all your friends to have their policies double-checked by good attorneys.  It is possible that flooding is one thing and storm surge another.  

        by k2winters on Sat Sep 10, 2005 at 12:22:25 AM PDT

        •  Nope

          Water is water, as far as insurance in Louisiana is concerned.  I'm basing this on my own experience, having lived there for seven years and from what my friend told me about her policy.

          And btw, my friend was lucky...no flooding and minimal wind damage.  

          by BarbinMD on Sat Sep 10, 2005 at 12:37:42 AM PDT

          •  That's just harsh.

            It seems pretty obvious to me that if a hurricane throws 20 feet of water onto your house, that different than the standard definition of 'flood.'  

            I'm glad your friend's going to be okay, but you're making me wonder here ... is Trent Lott covered for flood insurance?  Does he have some super-double-magic-secret insurance that the rest of the Gulf Coast doesn't know about?

            by k2winters on Sat Sep 10, 2005 at 12:49:37 AM PDT

            •  I have no doubt that he does

              I'm sorry if I wasn't clear.  Flood insurance is available, but the costs are astronomical.  I don't remember anyone I knew having it...and trust me, flooding is a popular topic in that neck of the woods.  ;-)

              As for storm surge versus regular flooding.  I see your point, but I believe the insurance company point of view is, you wouldn't be subject to storm surge if you didn't live in a flood-prone area in the first place.  

              by BarbinMD on Sat Sep 10, 2005 at 12:57:54 AM PDT

              •  No, you are always clear -

                I'm the muddled up one, ruing my lack of law degree here.  If water is water, like you said, then it sounds like a lot of folks are up a creek, no pun intended.  I guess it comes as no surprise, but the underlying message of my diary is that people shouldn't just give up.  I've seen firsthand what a good attorney can do with a previously unwinnable case.

                by k2winters on Sat Sep 10, 2005 at 01:39:31 AM PDT

            •  The magic words are......

              "wind-driven water".  That's a storm surge, not a flood.  Even if you have no flood insurance, you may be covered against "wind-driven water." Of course, the insurance companies will take advantage of folks who don't know the difference.

              by roxtar on Sat Sep 10, 2005 at 03:23:24 AM PDT

  •  It does seem reasonable

    That's why people are offered flood insurance--for damage from flooding.  There may be other riders as well, for example in my policy in Massachusetts, mildew/rot damage is capped at a pretty low amount unless you pay a lot to get that capped raised.  NOBODY is being caught by surprise that those without flood insurance will not be covered for damage from flooding.

    by Subversive on Sat Sep 10, 2005 at 12:26:51 AM PDT

    •  Libertarians are funny

      I try not to get into arguments with them, but after big disasters like this I can't stop myself asking them how their precious fantasy anarchies would handle it.  They always say "everyone would be insured".  This ignores that:

      a) everyone isn't insured now, why should they become so when the Anarchy Fairy waves her magic wand?

      b) insurance companies don't pay out if they can get away with not doing so.  

      They don't have any answer for a) and the answer to b) is "corporations would never do bad things, only states do bad things".  

      by Del C on Sat Sep 10, 2005 at 01:45:37 AM PDT

•  I recently bought a house.

  When I called a broker to arrange my insurance, the first thing he said was "you haven't filed in claims in the last three years, have you?"

  Uh, no, no I haven't.

  Well, he said, that's good.  And he wanted to give me a little advice: take a high deductible, because you don't ever want to file a claim.   It could make it really hard to get coverage in the future.  Same with the car insurance company.  Do I even need to mention health insurance.

  So, the insurance premiums for your health, your car, your home is strictly to cover catastrophic events.  

  Or, maybe not.  

  by 2lucky on Sat Sep 10, 2005 at 12:01:14 AM PDT

  •  No kidding.

    After 9-11, people who called their insurance companies just to ask if some-such damage was covered - those phone calls themselves where counted against them as if they had actually made a claim.

    I tell all my friends: do not call your insurance companies unless it's a catastrophic, unlivable situation.

    by k2winters on Sat Sep 10, 2005 at 12:10:02 AM PDT

•  Uhhhhh...

  Whoa!

  As I was reading your diary I slipped into a weird dream state. I found myself living suddenly in a second Gore administration:

  -----------------------------------------
  The same disaster had occured but it was because even intact, fully built levies weren't enough to stop the flood waters.

  However President Gore had acted immediately and sent all our civilian and military forces to rescue and airlift people out of New Orleans. Everyone was safely relocated and nobody died in the city!

  Here's the best part though, at least as it relates to your diary. When the insurance companies said they wouldn't pay up to the policy holders, US Attorney General Elliot Spitzer moved immediately too and filed federal fraud and racketeering charges against the CEO's and boards of directors of those insurance companies and had them arrested!

  He froze all the assets of the companies and assumed responsibilty for disbursing the claim money to the policy holders. All the claims were paid and the corporate officers were all convicted of fraud and racketeering and went to prisons for twenty year terms.
  -------------------------------------------

  Ahhhhhh....holy crap! Now I'm back in reality with Bush on his second term.....or maybe I'm just having a really long nightmare.....

  by Manix on Sat Sep 10, 2005 at 12:11:22 AM PDT

  •  Oh man,

    things could be so good.  They really could.

    by k2winters on Sat Sep 10, 2005 at 12:25:03 AM PDT

  •  Sniff, sniff

    I'm going to cry.

    by TracieLynn on Sat Sep 10, 2005 at 08:48:04 AM PDT

•  a friend of mine owns stores in NOLA

  she was told that her insurance covered the hurricane, but not the looting that ensued.

  by Trix on Sat Sep 10, 2005 at 12:13:02 AM PDT

  •  Yeah

    I remember reading a homeowner's policy once that said it covered rebellion but not revolt, or maybe the other way around.  I also recall that metorite strikes weren't covered.

    by ortcutt on Sat Sep 10, 2005 at 12:20:15 AM PDT

•  good call

  I am disgusted with insurance.  I heard a blurb about medical insurance on Air America the other day.  Something about how there are 2 models.  One is, everyone pays the same premiums and the more risky people and the less risky people balance each other out.  That would be a GOOD model for health insurance, except it's not really what America is heading towards.
  The other idea is the insurance co. assesses a patient's risk and charges them premiums accordingly.  That falls under the category of bad idea and that is where the US is going.

  My own little rant: I pay a fortune for dental insurance and it hardly covers a thing.  I didn't discover it til I got fillings.  I got the more modern kind that are tooth-colored instead of silver.  They told me ahead of time that fillings are 90% covered but they meant the silver kind.  Mine were barely 40% covered.
  Monday I get an implant. Those aren't covered. $1900. My $150 consult plus tooth extraction are covered.  Wow, thanks, $150.  That must be what I pay for each month.  Apparently back in the 1970s implants were experimental procedures so the insurance companies wouldn't pay.  Now implants are standard but insurance never paid so they won't start.

  by OrangeClouds115 on Sat Sep 10, 2005 at 12:13:50 AM PDT

  •  I bet everyone has their own rants.

    Mine: my 2 year old had his 2nd 106+ degree temperature in 2 days.  The first day, I took him to our doctor, who said, "well, the dangerous thing is if it happens again."  So, when it happened the next night (after office hours) I didn't hesitate and we tore off to the nearest ER.  Where we sat and sat and sat and finally after 5 hours were seen by a Physician's Assisant, mind you, not even an actually MD.  Luckily, my son was okay and we were sent home with a prescription for antibiotics (even though there was no clear diagnosis whether it was an infection or a virus).  But the bill was for almost $2000! And we have insurance!

    by k2winters on Sat Sep 10, 2005 at 12:34:12 AM PDT

    •  yup, I have one

      A few years back we had a home on a hillside east of Seattle.  A winter storm came after the ground was saturated, dumping 2 feet of snow. Warmed up rapidly after a couple days, the snow melted all at once and more rain fell and all that runoff went right through our lower level.  You could hear the water rushing out the lowest point at a door.

      Our policy did cover flooding, as we were 200 feet above the nearest river.  So, was that flooding?  According to the insurance company, no.  Flooding is 'rising water', not water coming down a hill.  Just so you know.

      by skwimmer on Sat Sep 10, 2005 at 05:49:06 AM PDT

  •  Private insurance, right?

    The thing with individually purchased dental insurance is that dental coverage isn't really "insurance." Most dental procedures are expected, routine, preventative measures. Now, in group insurance, those costs can be spread among the people who don't bother to get those procedures. There is always a decent percentage of people who just don't go to the dentist or don't get certain things done. But if you seek out to buy dental coverage, then the insurers know that you intend to use it. Since most dental issues are not life-threatening, you can't get the same sort of "catastrophic" coverage you get with medical.

    Probably be cheaper for you to just go with fee-for-service.

    by Magenta on Sat Sep 10, 2005 at 05:18:22 AM PDT

•  What about the fires after the flood?

  I've been wondering about the people who's houses burned down after the floods.  Would they be covered by their homeowner's insurance or would the insurance companies say that they weren't covered because the fire was caused by the flood.

  by ortcutt on Sat Sep 10, 2005 at 12:16:18 AM PDT

  •  I would expect

    ...that fire damage is fire damage and flood damage is flood damage.  So I would expect you to be covered if you can produce burnt embers, but not if you present soggy blobs of mildew.

    by Subversive on Sat Sep 10, 2005 at 12:29:19 AM PDT

    •  I wonder

      if that explains some of the fires.  Geez, I've become awfully cynical these days.

      by TracieLynn on Sat Sep 10, 2005 at 08:57:38 AM PDT

    •  I can here them now!

      The flood damaged the building to the point that is was already a total loss therefore the fire damaged a building that had no real value. The insurance companies are better at spin then Karl Rove,

      by Tomtech on Sat Sep 10, 2005 at 10:12:18 AM PDT

•  They're always cheap bastards

  The WTC was insured for $7 billion, with $3.5 billion per incident. That plane that flew into the north tower, and that seperate plane that flew into the south tower? Yep, one incident according to them.

  by jfern on Sat Sep 10, 2005 at 12:21:55 AM PDT

•  Millberg Weiss to the rescue?

  by NorCalJim on Sat Sep 10, 2005 at 12:22:25 AM PDT

•  A rock and a hard place !

  "The only thing that's clear is that the little guy is being set up to lose, and his only defense is hiring a good attorney."

  How can the person do that ?
  A good attorney costs money and where do people who've lost everything raise the funds needed to pay legal expenses, insurance companies will delay draw out claims and basically wear the claimant's down, these fucking parasites (the insurance companies) have the better leverage.

  by madbernie on Sat Sep 10, 2005 at 12:43:30 AM PDT

  •  Contingency.

    If you have a decent case, you will be able to find a decent attorny to argue it for you on a contingency basis, i.e., they get paid out of the money they win for you.

    by k2winters on Sat Sep 10, 2005 at 12:52:01 AM PDT

    •  But the odds have to be in your favor

      in fairness to the lawyers they are not only risking their time some of their expenses are huge.a friend of mine is a lawyer (he's almost human)he gave me a look behind the scene in his practise....I've changed my opinions on what I used to think of these people.

      by madbernie on Sat Sep 10, 2005 at 02:40:38 AM PDT

•  As Dennis Kucinich said

  quoting to the best of my recollection: "Insurance companies make profits by NOT providing care. What's wrong with this system?" He was talking about health insurance, but same deal.

  by monster on Sat Sep 10, 2005 at 12:46:33 AM PDT

  •  That's it in a nutshell. nt.

    by k2winters on Sat Sep 10, 2005 at 01:17:20 AM PDT

•  Cheney talked about this yesterday

  He laid the groundwork.

  Walking around a residential street in Mississippi on a street that had been recently bulldozed, piles of rubble in their yards 8 feet high, Cheney mused about the distinctions between hurricane and flood damage. Apparently flood damage from hurricanes isn't covered under a hurricane policy and wind-damage isn't covered under a flood policy.

  Murky waters run deep.

  by hmbnancy on Sat Sep 10, 2005 at 01:27:27 AM PDT

•  Insurance

  I own a little house in North Carolina...you know, where Hurricane Floyd hit? Well, our home insurance is now a "Fire" policy, and some underwriters assoc. is covering "Wind and Hail"...I also have flood insurance because a tiny corner of the house is in a 100 year flood plain. The Mortgage company has decided that the deductible for wind coverage was too high. So I called to change it from $2500 to $2000. Sounds simple, right?
  Nope. Turn out that the Wind policy has to have the same deductible as the fire policy. Well, just change bothh, you say? I tried. Turns out that there are only 3 choices for deductibles..$500, $1000, and $2500...I can't wait to get the bill for the $1000 deductible on BOTH policies.
  Anyone want to buy a little house with a great rental history? Mind you, maybe I should wiat until we see which way this new hurricane is going, huh?

  by Kifaru1 on Sat Sep 10, 2005 at 05:01:17 AM PDT

  •  Sorry for the spelling...I can't type:)

    by Kifaru1 on Sat Sep 10, 2005 at 05:03:14 AM PDT