Wednesday - January 24, 2007

Like A Good Neighbor?

Quiz: Carefully examine this picture of a former house on the Mississippi Gulf Coast. Would you say the house is no longer there due to: (a) rising flood waters or (b) 150 mph winds?

If you guessed (a) then you are incredibly stupid or you work for State Farm Insurance - or both. State Farm has been refusing to pay insurance claims to people along the Gulf Coast, claiming their homes were wiped off the face of the Earth by flood damage and the people did not have flood insurance.

Mississippi Attorney General Jim hood stepped in and said, “Not so fast, Mr. Big Insurance!”, orders up grand jury and applies pressure. State Farm suddenly realizes their argument doesn’t hold water and agrees to fork over money to policy holders. Obviously greed had nothing to do with this, right?

In related news, State Farm announced today that in order to compete with the GEICO gecko and the AFLAC duck they have hired a weasel to be the new company spokesanimal.

Big Insurer Will Pay 640 Katrina Claims
_{(NY TIMES) - January 23, 1007}

In a move that is expected to jump-start rebuilding along the Mississippi Gulf Coast, State Farm Insurance said yesterday that it had reached an agreement with state officials to pay hundreds of millions of dollars to owners of homes along the coast that were wrecked by Hurricane Katrina.

The agreement settles lawsuits filed by 640 homeowners and allows thousands of others to reopen damage claims that State Farm previously closed. Insurance executives said they expected the outlines of the deal to be adopted by other carriers.

The agreement does not apply to New Orleans, where the failure of the levees left much of the city underwater for days. Lawyers and insurers say no similar settlement talks are in progress there.

For State Farm, the nation’s largest home insurer and the biggest in Mississippi, the settlement allows for “a just, speedy and efficient resolution,” as a spokesman, Phil Supple, put it.

It would also remove a major public relations headache. While State Farm and the other insurers may have had some strong legal arguments, they have been widely perceived as insensitive. In many cases, residents whose houses were reduced to concrete slab foundations received just a few thousand dollars in payments. Some received nothing.

Under the settlement, 300 homeowners who lost everything will receive their full insurance coverage. Mississippi officials said 1,000 others would receive at least half, with the opportunity to negotiate for more.

“A lot of people on the coast are going to see money in their pockets sooner, rather than have to go through a long, drawn-out process of court proceedings,” Mississippi’s insurance commissioner, George Dale, said yesterday.

The core of the dispute was whether the damage to the houses was caused by high winds or surging floodwaters as Hurricane Katrina swept across the coast on Aug. 29, 2005. The insurers said their policies covered only wind damage. But in many cases, they also refused to pay for damage caused by a combination of wind and water.

The settlement does not affect the terms of coverage in the insurers’ policies, but some insurance experts said they expected that the carriers would ultimately rewrite their policies to specifically bar coverage of damage from storm surges.

In the settlement talks, which began last fall, State Farm insisted that the Mississippi attorney general, Jim Hood, drop a criminal investigation of the company’s handling of storm damage claims. It also demanded that he abandon a civil suit against it and other insurers.

The final sticking point in the agreement had been over the framing of a few sentences that would end the criminal investigation. Mr. Hood convened a grand jury last week that began hearing evidence.

- More ...

Posted by The Skipper     on 01/24/2007 at 01:04 AM   
Filed Under: • Climate-Weather •  
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It's been a long strange trip without you Skipper, but thanks for pointing us in the right direction and giving us a swift kick in the behind to get us going. Keep lookin' down on us, will ya? Thanks.

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