Katrina’s force broke New Orleans’ levees drowning the city, and many of its residents. Her rains drenched the Gulf Coast. Financially speaking, though, it was the insurance companies that really soaked Katrina’s survivors . . . and us, the taxpayers.
Clearly, the cost of Katrina has been tremendous, and the deluge of claims to the federal flood insurance program has been unprecedented. According to the Congressional Research Services, the largest number of flood claims prior to Katrina was 31,000, and that was back in 1995. The aftermath of Katrina, Rita, and Wilma created 258,000 flood claims. That’s an increase of 800%!
Yesterday’s piece titled Wind? Water? More like a bunch of hot air!, discussed the insurance companies written memos that apparently directed agents to blame Katrina’s damages on water, even if wind damage were present. To date, those companies have sent a $23 billion bill to the federal government’s flood insurance program for damages allegedly caused by water alone.
As the 2007 hurricane season officially began at the start of this month, Risk Management Solutions Inc. had hoped to gain approval for an extraordinarily controversial forecast model which would have “increase[d] projections of potential hurricane losses by as much as 40 percent in Florida, the Gulf Coast and the Southeast -- moves that [would have] translate[d] into drastically higher insurance rates for already-battered policyholders in coastal states.”
My god, these people will stop at nothing to make money off of our tragedies. With insurance companies already failing to live up to their fiduciary responsibilities to us as policyholders or as taxpayers, the last thing we need is some forecasting company lobbying states to adopt their controversial model as the basis for authorizing the insurance companies to gouge us further through increasing our premiums for coverage they won’t pay on.
Blinded by greed, the insurance companies have already dramatically increased their post-Katrina premiums—if they hadn’t already packed up their bags and skipped town taking our policies with them.
"We can't, every time there's a hurricane in the United States, raise insurance rates 50% and then expect to 'let the private sector redevelop.'" — U.S. Sen. Mary Landrieu (D-LA)
With 55% of the U.S. population living in coastal communities, we all need to pay close attention to these corporate maneuverings. If we don’t live within close proximity to America’s coastline, surely to goodness we have relatives, friends, or coworkers who do.
Boy, do we ever need to implement national insurance reform. Let’s start this discussion with a quick question.
In which political party has the insurance industry invested 80% of its political monies for presidential campaigns between 1992 and 2004?
You have thirty seconds. Can you hear the theme to Jeopardy playing in your head? Da da da da . . .Finished? Good.
If you answered: What is the Republican Party? You are correct!
Before we get to what it all this means, let’s flush out the specifics of this financial partnership between the insurance industry and the Republican Party.
From 2000 – 2006, the insurance industry consistently invested its political dollars in Republican candidates by a margin of 2 out of every 3 dollars it spent. Now, when we break it down specifically to the difference in how the insurance companies invested in the Democratic and Republican presidential campaigns of 2000 and 2004, the margin increases substantially.
Of the $27 million the insurance industry invested in the 2000 federal elections (that would be the presidential and U.S. senatorial and congressional races), the insurance industry invested FIVE times as much money in Republican nominee Texas Governor George Bush to the tune of $1.7 million as it did in Democratic nominee Vice President Al Gore with only $330 k.
Four years later in 2004, the insurance industry practically doubled it investment in Republican George Bush giving his campaign $3.3 million compared to the paltry $848 thousand the industry contributed to the campaign of Democratic presidential nominee U.S. Senator John Kerry.
“So what?” you may say. Let’s put some context around this, so we can get perspective on it.
In 1996, the insurance industry gave only $700k to the campaign of Republican presidential nominee Bob Dole and $300k to President Bill Clinton’s re-election campaign. Going back another four years to 1992, the insurance industry gave only $550k to the reelection campaign of President George Bush, Sr. and $190k to the Clinton presidential campaign.
From 1992 to 2000, the insurance industry became wildly enthusiastic about investing its corporate profits in the Republican candidate George W. Bush. The industry increased its investment from father to son by 600%. Geeze, Louise!
No wonder the industry is having a hissy fit over Republican Minority Leader Trent Lott leading the charge against the industry’s corrupt practices.
I suppose come hell or high water, the insurance industry will soak us . . . until you and I do what must be done politically inside the legislative arena at the federal level to turn things to our favor.
This week’s political hell raising activities include supporting two important legislative measures. First, Gulf Coast Congressman Gene Taylor (D-MS) introduced a bill to expand the federal flood insurance program to include all natural perils. Following the rules established under the leadership of House Speaker Nancy Pelosi (D-CA), the legislation requires that the program be financially self-sufficient. Click here for political hell raising activities to provide real all perils insurance for Americans.
Second, Democratic leaders in the U.S. Senate have introduced legislation to close the insurance industry’s legal loophole that allows it to collude to price gouge and to pass off their own business costs to the federal flood insurance program. U.S. Senator Mary Landrieu (D-LA) and U.S. Senator Trent Lott (R-MS) are among the co-sponsors of this important legislation. Click here for political hell raising activities to close the loophole.
Everywhere else in the U.S., it’s the beginning of summer. Officially here in Katrina land, it’s the opening of the hurricane season. Everyone wants to know what we’re doing to protect ourselves. One thing is certain. We’re supporting the efforts of our elected officials to pass two important pieces of legislation that will protect our families . . . and yours.
Raising a little political hell together, we can protect everyone’s families from being soaked by insurance companies.