Mississippi making a stand for homeowners and tenants.

Published on September 20, 2005 By dharmagrl In Current Events

The state of Mississippi is suing 5 major insurance providers in an attempt to force them to pay for billions of dollars in damages done by hurricane Katrina.

A lot of homeowners are under the assumption that the damage done to their homes will be covered by the hurricane provision of their policy. The insurers are saying that's not so, and that the damages will not be covered because they were caused by flooding....and you need a separate policy to cover flooding.

Attorney General Jim Hood said that denying coverage to those who were left homeless by the storm was "taking advantage of people in the most dire straits".

I agree. I think that a lot of people along the Gulf Coast probably asked their insurance agent if their coverage included hurricane damage, and they were probably reassured that it did. To deny their claims and say that the damage was done by flooding so they can get out of having to pay out.....that's reprehensible.

Now, if the insurees were informed that they'd need to purchase additional coverage for damage done by the storm surge....well, then they should have heeded that advice. Having dealt with one of the companies being sued regarding my own renter's insurance policy, I can say that I wasn't completely informed about what was covered and what wasn't. It was only because I sat and read the policy cover to cover that I knew I needed more coverage for certain things. The insurance agent didn't tell me anything about it.

Good on ya, Mississippi!

Comments (Page 2)

Silver_and_Jade_Tears

on Sep 21, 2005

I was just scanning this article, and for some bizarre reason I thought that the first sentence said, "The state of Mississippi is suing 5 major insurance providers for damages done by hurricane Katrina."

Lesson of this post?

Never scan.

bakerstreet

on Sep 22, 2005

To my knowledge NO flooding is covered at all. Whether that be from a hurricane or anything else. I don't even think storm surge is covered, is it?

This to me isn't an issue of people not getting what they paid for, rather people who didn't know what they were paying for. Worse, many of these people are from areas where flood insurance is the norm. They really don't have an excuse other than the fact maybe they thought they'd be able to pull off a lawsuit like this.

dharmagrl

on Sep 22, 2005

If homes were destroyed because the levees broke, shouldn't whoever is responsible for the levees have to pay for the damage caused because of that?

See Ted's response to that one.

know that one of the companies that was named is the company that I have my insurance from. They very clearly told me when I got my insurance (two years ago) that any damage caused by flooding was not covered, and that INCLUDED flooding in a hurricane. I mean, they repeatedly spelled it out to me--probably for this very reason.

I'm sure that there are agents who are honest and upfront and who will tell people that. However, there are those who will not.

What good is Hurricane insurance if it doesn't cover the damage done by a hurricane? Last time I checked, storm surge and rainfall was part and parcel of a hurricane. How is the damage assessed? do people get a partial payout for wind damage, or does the entire policy become null and void as soon as there's flooding?

If these people didn't read their policy, and didn't realize hurricane damage didn't cover flooding from the hurricane, then they are getting paid out for stuff they didn't buy.

Not necessarily. Can they not recieve payment for the damage done by the high winds?

I read where they are already planning to sue the contractors of the levees

And so the litigation chain begins......

assume a little grandstanding on those AG's part is more of a political stand than "sticking up for the little guy", and granted, insurance companies will seek a loop hole in a nano-second, this one is very well spelled out in coastal communities ( at least here, and I can't imagine why it would be any different on the gulf coast ).

yes, the insurance companies will back out as soon as they get a chance; they're profit motivated and this hurricane is going to cost them....so of course they'll look for a way out. That, however, is unfair to the policy holdres who paid their premium every month, thinking that if a hurricane hit they'd at least be covered for the wind damage.

I predict that your prediction will come true.

We'll see.......!

Lesson of this post?

Never scan.

Hehehe....lesson learned!

To my knowledge NO flooding is covered at all. Whether that be from a hurricane or anything else. I don't even think storm surge is covered, is it?

I don't know. I'll go check today, though....all this has raised a few questions for me about hurricane insurance and what exactly is covered by it.

bakerstreet

on Sep 22, 2005

The agent that they interviewed a day or two ago said that hurricane damage was basically wind damage, and anything else they covered beyond flooding.

I don't mean to be crass, but I don't WANT them to cover flooding. I think everyone here knows that there are idiots all over the country whose house floods every ten years or so, just because they keep building in flood prone areas. The losses insurance companies take on people like that are spread out over OUR premiums. Is it fair that we pick safe places to live, and then have to pay higher insurance because of people who don't?

Like the people in California who insist on building 2 million dollar homes on the sides of hills that slide off every few years. It just simply isn't fair that I and others like me have to absorb the cost of other people's negligence.

That said, I know that New Orleans and the Mississippi flood plain isn't usually so bad in these particular areas, and I think it sucks, but that's what FEMA flood insurance is for. If you think insurance companies suck NOW, wait until after a few greedy lawyers force them to absorbe BILLIONS in damage that people weren't paying premiums for.

dharmagrl

on Sep 22, 2005

The agent that they interviewed a day or two ago said that hurricane damage was basically wind damage, and anything else they covered beyond flooding.

Thank you, that answered my question.

I can understand your not wanting them to cover flooding. I really, really do. People who insist on building and then re-building in flood prome areas make our premiums go up, so everybody suffers for one person's bad choices.

How can an adjuster decide what damage was done by winds and what was done by flooding? Surely the people who had hurricane insurance should recieve some kind of pro-rated payout? Not ALL of the damage was done by the storm surge, the winds had a lot to do with it as well. Is it right to deny a person's claim completely? I don't think so, and I think that's what the AG is complaining about.

bakerstreet

on Sep 22, 2005

I guess some houses you can tell. The ones they were looking at during that interview were all still standing, and you could see the water line up around the roof. As for the ones that are just gone, or completely fallen in, I have no idea.

Dynosoar

on Sep 22, 2005

I saw an interview of John Stossell ( ABC 20/20 ) on the FOX News shortly after Katrina. His specialty is the "Your Money" segment, where he exposes government waste, BUT, FOX was interviewing him about a house he owns somewhere on the East Coast, that government insurance had rebuilt twice due to storm damage.
His response was the insurance negated any risk, his rental income far outweighed the premium expense, and he could NEVER rebuild without the Govt underwriting.

Something is wrong when risk is removed by tax dollars.......

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