Revving Up Insurance Reform Momentum!

by Ana Maria

Last week posted two major victories for property owners in the United States. The first came Thursday with a strong bi-partisan majority vote (263 – 146) for the multiple peril legislation that Congressman Gene Taylor (D-MS) had successfully incorporated into the bill (H.R. 3121) that reauthorized the National Flood Insurance Program. Once this bill goes through the legislative gauntlet and becomes law, American property owners will again have the option of purchasing one insurance policy that covers both flood and wind damage. That is not something we’ve seen since the 60’s when the private insurance industry quit covering flood damage to residential and commercial properties.

The second came immediately on the heels of the passage of this magnificent multiple peril legislation.

A federal jury in south Mississippi sided Friday with a couple who sued their insurance company after Hurricane Katrina for refusing to cover more than $1.7 million in damage to their beachfront home and property.

The eight-member jury wasn't asked to specify how much money USAA Casualty Insurance Co. owes Kevin and Sherrye Webster for damage to their home in Bay St. Louis.

But jurors concluded that all of the damage to the couple's house was caused by Katrina's wind, wind-blown debris or wind-driven rain—perils that are covered by the San Antonio-based insurer's policies.

Glory be, and halleluiah! The precedent has been set. So powerful a precedent that the insurer apparently immediately made an out of court settlement offer. John Cocke, one of the Webster’s attorneys said “USAA will owe the Websters at least $800,000.”

The Websters' policy had limits of $811,000 for the house, $81,000 for a barn on their property, $162,200 for living expenses and $760,480 for the home's contents. USAA paid them $10,944 for wind damage to the house and $42,929 for the barn.

Apparently the punitive damages part of the lawsuit continues. Good. Many insurance companies have ripped off property owners here in Katrina Land and across the country.

Two major victories for American property owners and both had their beginning right here in my hometown of Bay St. Louis, Miss.,—one of the coastal beach towns comprising Katrina’s ground zero.

Next is convincing U.S. Senator Trent Lott (R-MS), who also holds the distinguished position of Senate Minority Leader, to introduce companion legislation in the Senate. Lott also lost his Gulf Coast home in the Katrina winds. The irony of ironies had Lott hire the ever tough lawyer Dickie Scruggs, of the Scruggs Katrina Group and Lott’s own brother-in-law, to sue State Farm to obtain the insurance money that the company should have sent him in a matter of weeks, if not days of filing the claim.

In a classic example of “it all depends on whose ox is being gored ,” Lott availed himself of the very American legal system of which he had been so critical, a system that is in place to protect against corporate greed, avarice, and other wrong doing such as has been lain bare for all to see with the insurance companies failure to live up to their good hands, good neighbor marketing.

A lifelong apologist for corporate behavior and a darling of the insurance industry from way back, Lott has changed his tune. Losing everything you have—including faith in a corporate system that has had their way with him, ways that he could never have ever imagined could have befallen his family—often has us looking at things through a very different lens.

Today, we need his baritone voice to lead us through the U.S. Senate. His leadership is important and he has begun to indicate his willingness to lead the country in a new tune. Some of his more notable quotes came in a May Bloomberg article.

"It's long overdue for this industry to be held accountable''
"I'm prepared to continue to kick their fanny until the last day I'm alive on this Earth because they have mistreated too many people.''
"These are venal people,'' he says. "I'm embarrassed for them.''

We have so much work to do down here. Our housing situation is pathetic both for homeowners and renters. Not much construction going on because insurance is either sky high or impossible to get and because many insurance companies have padded their profit margin with the money it had owed its policyholders. Mississippi’s Republican Governor Haley Barbour—former head of the Republican National Committee—is trying to swipe $600 million of federal money to “from disaster relief accounts to help double the size of the Port of Gulfport” which is a city in the middle of the state’s coastline. That $600 million was intended for the Home Owners Grant Program.

Just the other day I spoke with a woman whose family is still awaiting news for a grant to fund elevating their home. The grant worker told her that the fact that there has been no work on her home is a positive in terms of getting that particular grant.

Oh yeah? It’s been over TWO years since the hurricane. There should be NO money left to administer. This project should be in the shut down and being audited to account for the funding phase. The only reason the lady, her husband, and their six children remain in the two FEMA trailers . . . is because they don’t have money to rebuild their home.

In the meantime, we have bureaucratic red tape that should be the shame of every administrator associated with the program. Efficient and effective delivery of the money apparently doesn’t mean . . . efficient and effective delivery of the money to those for whom it was intended.

Heck, it was only a few months ago that a dear friend of my family, a 78 year-old woman, received her original grant. Goodness gracious! This is beyond ridiculous.

So, we have Governor Barbour trying to swipe the money from our homeowners grant program. We have no construction boom which means that families remain living in the formaldehyde-filled FEMA trailers or living with friends and family. We have homeowners waiting for the insurance companies to live up to their financial obligations to pay on the wind damage policies. And the economic impact of all of this is . . . stagnation, a stand still.

Like oxygen, insurance isn’t sexy or exciting . . . until you don’t have a good supply of it when you need it.

Absolutely, last week’s triumphs were a major breath of much needed fresh air. A big boost in the engine of hope that we can effect a vibrant recovery. A wonderful win for the human spirit centered on persistence, perseverance, and political action.

To keep things moving in this direction so that we can continue to end the madness that is eating away at the financial security for our nation’s families and business, let’s dedicate today’s political hell raising to asking Senator Trent Lott to use his baritone voice to lead the Senate in a perfect harmony with his Congressional and Democratic counterpart some 40 miles west of his Pascagoula, Miss., home—Congressman Gene Taylor. Let’s contact Senator Lott and ask him to be the primary sponsor of the Multiple Peril Legislation in the Senate.

We’ll ask him to make good on his words about it being “long overdue for this industry to be held accountable'' and being “prepared to continue to kick their fanny . . . because they have mistreated too many people.''

With those words, Senator Lott is singing a tune in perfect harmony with many of us throughout the nation. Together, imagine how we can really rev up the engine for insurance reform.

© 2007 Ana Maria Rosato. All rights reserved.
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