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Thread: Told Ya

  1. #1
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    Default Told Ya

    Louisiana set for an epic legal fight
    By Christopher Swann in Baton Rouge and Andrew Ward in Atlanta
    Published: September 11 2005 22:02 | Last updated: September 11 2005 22:02

    Louisiana is facing an epic legal battle to determine who should pay to repair damaged properties, with insurance experts predicting that tens of thousands of homeowners will discover their insurance claims will not cover the cost of rebuilding their homes.


    Jim Brown, Louisiana's insurance commissioner from 1992 until 2004, estimates that only a quarter of houses in the poorest areas affected by Hurricane Katrina had flood insurance. Standard insurance policies, carried by almost all homeowners, cover damage caused by storms but not floods.

    In addition, those who bought federal flood insurance beyond the means of many poorer households may find compensation falls short, since it covers losses of only up to $250,000. “There is a big insurance gap,” said Mr Brown. “In all likelihood many people will suffer great financial loss.”

    Similar disputes are expected along the Mississippi coast, where the worst damage was caused by the storm surge brought ashore by Hurricane Katrina rather than the 145mph winds. Experts said disputes are likely to arise over whether a storm surge will be classified as a flood.

    Flood coverage was offered under a scheme backed by the Federal Flood Insurance Program. But it was expensive, costing up to $1,000 a year for a $200,000 home.

    “The [physical] nightmare of the emergency is hopefully over for many people but the financial nightmare is just about to begin,” said E.L. “Bubba” Henry, alawyer representing insurance companies.

    A report by Risk Management Solutions, a company that provides catastrophic risk data to insurers, estimated that losses from the hurricane could reach $125bn, with insured losses of between $40bn and $60bn. Insurance experts said in general, if damage is caused by wind or rain, the insurance companies are liable. But if the water comes from the ground, the Federal Flood Insurance Program is liable. Many homeowners are expected to argue that the flooding was caused by the wind and torrential rain, which led to the bursting of the levees in New Orleans.

    James Donelon, general counsel for the state Department of Insurance, believes this question will have to be decided in court.


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    I saw someone on the news the other night looking for their compensation "just like those 9-11 families"

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    Quote Originally Posted by firepics
    I saw someone on the news the other night looking for their compensation "just like those 9-11 families"
    What would you expect?
    Nagin opened THAT door.
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    I lost my father 4 years ago after a 6 month battle to leukemia. He was 53. Why don't I get anything? He went to the doctors, two days later he was diagnosed, 6 months later he died. My loss hurts my family the same as the new orleans families and the same as the 9-11 families. I didn't receive a dime. Life goes on.

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    They don't call La the GREAT WELFARE STATE for nothing!
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    It's BS the insurer's won't pay them. So what if it flooded? There was a Cat 4 hurricane before the storm surge.


    On another note, I find it kind of funny how many of you bash on the state of LA, talk about how they oughta just bulldoze the city- "To hell with 'em, they built on a flood plain anyways"- but yet, you criticize those who are unwilling to help, or the mayor of an Illinois town who ordered its firefighters to return. I guess I'm confused...do you want to help these people, or are they better off rotting and floating off into the ocean?

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    Quote Originally Posted by parafire81
    It's BS the insurer's won't pay them. So what if it flooded? There was a Cat 4 hurricane before the storm surge.


    On another note, I find it kind of funny how many of you bash on the state of LA, talk about how they oughta just bulldoze the city- "To hell with 'em, they built on a flood plain anyways"- but yet, you criticize those who are unwilling to help, or the mayor of an Illinois town who ordered its firefighters to return. I guess I'm confused...do you want to help these people, or are they better off rotting and floating off into the ocean?
    Save the people, forget the property.
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    that's how I do it, I'm a firefighter!

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    MembersZone Subscriber BVFD1983's Avatar
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    If they do not have the proper insurance, it is their own fault.

    "I live ten feet under sea level but I do not need flood insurance..."

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    You're forgetting some of the people getting screwed out of insurance claims live in MS, above sea level.

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    MembersZone Subscriber BVFD1983's Avatar
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    Okay.

    "I live in hurricane alley, but I will decline that flood insurance."

    We live on top of a hill and have flood insurance, it is beyond me why anyone within ten miles of any type of stream would not have flood insurance.
    Last edited by BVFD1983; 09-14-2005 at 11:27 PM.

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    Maybe because they figured they'd get blown away by a hurricane and not a flood.

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    OK. Once more for the ignorant...

    An insurance policy is a business contract between the insurance co. and the insured. In that insurance policy, there are very clearly defined items, such as the responsibilities of the company, the responsibilities of the insured, what property is covered, what property is not covered, the dollar value limits of the coverage, what perils are covered and what perils are not covered ( a "peril" is a factor that caused the loss).

    If a peril is specifically excluded in an insurance policy, the insurance company is under no obligation to pay a loss caused by it. An insured accepted that fact when they purchased the policy and signed the application. Conversely, the insurance company is under total obligation to pay for a loss caused by a covered peril. The insurance co. also has a complete responsibility to deal with the insured in good faith.

    If you look at any standard property insurance policy, you will probably find that losses caused by flood of any type (natural, not burst pipes or things like that) are specifically excluded from the coverage. There are several reasons for this. 1. Most people do not need flood insurance. 2. Flood insurance is expensive. 3. If a person has a fire in their house, chances are, they are not going to have another fire. If a person has a flood loss, chances are high that they are going to have another one. That makes covering flood losses under a standard homeowners policy a bad business decision.

    This is not a deception of the big bad insurance cos. Most states have plain language laws that requires the provisions of the policy to be clearly spelled out. They are nt trying to screw people and they are not trying to get out of an obligation that they have. In conventional hurricanes, damage caused by wind, downed trees and flying debris are covered. They will be covered in this case. But the losses caused by floods will not.

    You can buy flood insurance. Many mortgage cos. require that you buy flood insurance if you live in certain areas. Flood insurance is so expensive that it is federally subsidized. If you choose not to buy flood insurance, sorry if it sounds cruel, but it is your own fault. It is also doesn't matter if you are 10 feet below sea level or 10 miles above it-flood losses are not covered.

    How many times do you go to a fire and find out the victims are underinsured or uninsured? For whatever reason, those people rolled the dice and lost. Should aninsurance co. be required to come in and cover the loss after the fact? Of course not.
    Last edited by GeorgeWendtCFI; 09-15-2005 at 04:08 AM.

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    Disillusioned Subscriber Steamer's Avatar
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    Actually, if the property is in a flood hazard zone and is mortgaged by a federally insured or federally regulated lending institution, the flood insurance is required by law.
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    Thats like buying insuranse aganst tornados, and the insurance not paying because the damage was caused by the debris in the tornado, not the tornado (wind) it's self. Hurricaines bring water, brought in water = water damage as well as wind damage, but wind, water, debris, whatever else.... it's still from the hurricaine. The NO ins. companies may have a point that it wasnt the hurricaine, but the failed levy system that caused the water damage, but all other places should have to pay up.
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    Quote Originally Posted by CoolDre
    Thats like buying insuranse aganst tornados, and the insurance not paying because the damage was caused by the debris in the tornado, not the tornado (wind) it's self. Hurricaines bring water, brought in water = water damage as well as wind damage, but wind, water, debris, whatever else.... it's still from the hurricaine. The NO ins. companies may have a point that it wasnt the hurricaine, but the failed levy system that caused the water damage, but all other places should have to pay up.
    It's more like trying to buy fire insurance after you have had a fire.

    It doesn't matter if it is NO, MS or Minnesota, a standard insurance policy does not cover flood losses. They will pay for wind damage and other types of storm damage, but as a specificall excluded peril, flood damage is not covered.

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    I see your point, but the hurricane blew their house apart, then a flood came and covered the debris. I'd like to know the criteria that the adjusters are using to determine whether it is flood damage or storm (wind) damage.

    I realize that an insurance comapny is not in the business to pay on claims (or atleast they don't like to), and there is no doubt these people should have had flood insurance, but the companies are taking advantage of the situation that there was a flood after the fact, and denying claims. It's just wrong.

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    Quote Originally Posted by parafire81
    I see your point, but the hurricane blew their house apart, then a flood came and covered the debris. I'd like to know the criteria that the adjusters are using to determine whether it is flood damage or storm (wind) damage.

    I realize that an insurance comapny is not in the business to pay on claims (or atleast they don't like to), and there is no doubt these people should have had flood insurance, but the companies are taking advantage of the situation that there was a flood after the fact, and denying claims. It's just wrong.
    You are wrong on virtually every point.

    1. I don't have a "point". It's a matter of insurance law.
    2. The insurance cos. will pay for wind, rain, and debris damage. They will not pay for flood damage. I am not an adjuster, but they use criteria that seperates the damage into wind, rain, and flood.
    3. An insurance co. is in business to pay claims. That is part of a business contract. But they are not a social services agency. They pay valid claims that are within the scope and bounds of that business contract.
    4. There is no proof that the insurance cos. are "taking advantage" of a situaiton. They will pay valid claims. They will not pay flood claims. That is right. That is what these people paid for. That is what they will get. If they didn't read the contract, too bad for them.

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    Flood information (ironically a FEMA site):

    http://www.floodsmart.gov/floodsmart/pages/index.jsp

    http://www.floodsmart.gov/floodsmart.../fastfacts.jsp

    One of their fast facts: "Homeowners insurance doesn't cover flood damage."

    Insurance info is available here:

    www.iii.org

    Having worked in the business, you need to read your policy and all the booklets that come with it -- be informed! Ask questions, meet with your broker or one of their assistants. If you haven't updated your "contents" portion of your HO's lately -- I would take a look at it to see how much is covered. With Computers, TV's, and other Electronics filling homes, you may not have enough coverage. And if you rent, get renter's insurance for your personal property. If you go through the same company that insures your vehicle, you can get a multi-policy discount.

    Something else you may not know -- the property in your car, if stolen, is covered by your HO and not your Auto policy. And, if your vehicle is paid off, make sure your Auto insurance policy reflects that (they'll need a copy of the loan satisfaction).
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    Quote Originally Posted by GeorgeWendtCFI
    You are wrong on virtually every point.

    1. I don't have a "point". It's a matter of insurance law.
    2. The insurance cos. will pay for wind, rain, and debris damage. They will not pay for flood damage. I am not an adjuster, but they use criteria that seperates the damage into wind, rain, and flood.
    3. An insurance co. is in business to pay claims. That is part of a business contract. But they are not a social services agency. They pay valid claims that are within the scope and bounds of that business contract.
    4. There is no proof that the insurance cos. are "taking advantage" of a situaiton. They will pay valid claims. They will not pay flood claims. That is right. That is what these people paid for. That is what they will get. If they didn't read the contract, too bad for them.

    1. Yes you are trying to make a point, in your opinion, the insurance companies don't owe a dime, and these people are idiots for not having flood insurance.
    2. The insurance companies are not paying ANYTHING to ANYONE if they feel the poperty has been damaged by flood, regardless if there was damaged caused by any other force or nature. To them, it doesn't matter if the house was blown apart by wind damage, if there wer flood waters, they are denying the claim altogether.
    3. Insurance companies do not like to pay claims. This is why if you have car insurance, you premium goes up after an accident, same with homeowner's insurance, if you have a fire. They want your premium, and they hope they never have to pay anything back to you.
    4. No proof of taking advantage of the situation? Tell that to the guy in MS I saw on CNN yesterday whose roof was in the top of a tree, but his insurance company denied the claim saying the destruction of the house was not due to wind, but flood waters...that only got about 5 feet deep in that area. If floods destroyed his house, how did his roof end up 20 feet up in a tree? Yeah that insurance company is not trying to take advantage of anything! I wonder just how many claims are going to be paid out for non-flood damage?

    A note on floods, floods usually surround a house and ruin things like contents and cause some minor damage structurally, they don't usually level a house and leave it resembling something hit by an F4 tornado.

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    but the hurricane blew their house apart, then a flood came and covered the debris. I'd like to know the criteria that the adjusters are using to determine whether it is flood damage or storm (wind) damage
    Ok, here's another thought: During an investigation involving a death, the decedant was impalled with a screwdriver (possible homicide or accidental?), was struck on the head by falling debris from the structure fire (due to overloaded electrical circuits) and was found to have smoke inhilation.

    What killed him?

    For parafire's point, unless there is actual video evidence, how would you know (from an insurance adjusters point of view) which caused the initial damage: the flood or the wind? Do you read the policy and determine which part of the event was not covered in the policy and then report "no payment" because of that missing clause?

    There is an add for insurance that runs on the radio in DC that makes me shake my head everytime, because the main message (I think) is how well the company is willing to pay out, but each story tells how well they will NOT pay out. Or maybe I am just getting the wrong message?
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