LA: State Farm Again Beating Up Katrina Survivors

by Ana Maria

There ought to be a national registry of child molesters and insurance company executives because I hold them in the same very low esteem.
- Congressman Gene Taylor

So, let's get this straight. Hurricane Katrina battered homes with its 175 mile-per-hour winds ripping them apart as if made of straw and spit. Then insurance companies like State Farm deliberately and wrongly failed to pay American families for the wind related damages to those homes and the cost of living expenses while the home was being repaired, damages that the wind coverage under homeowner insurance policies cover.

When insurance companies failed to cover the cost of those living expenses, the federal government picked up the tab for the expenses the insurance industry. This unintended insurance industry bailout cost the American taxpayer billions in taxpayer dollars.

Yep, that's what it is: an unintended insurance industry bailout which the American taxpayers funded when insurance industry execs betrayed its customer base in the name of pursuing the Almighty Dollar.

After denying families all or some or substantial amounts of their wind-related claims, after putting these families through an extracted living hell far worse than the damage of Katrina several times over, after forcing many--including U.S. Senator Trent Lott (R-MS) and Congressman Gene Taylor (D-MS)--to hire attorneys to sue State Farm, Allstate, and other insurance companies to obtain some funding for the damages caused by those 175 mile-per-hour winds which battered their homes for four hours BEFORE the water ever came ashore, AFTER all of that, State Farm now wants proof that whatever paltry sum of money it finally coughed up has been used to rebuild . . . or the company will cancel the insurance.

Are you kidding me?!

This is the same company that slipped a tiny clause into its homeowner policies, the same company whose agents were left flat footed when they themselves found out about the buried clause, the same company who never bothered to advertise or explain fully the implications of its "concurrent causation" clause--ya think that was deliberate?--the same company that simply sprung its buried clause on its many customers once the company knew full well that it would have to actually pay out for the Hurricane Katrina's damages. Ditto for the rest of Big Insurance companies. What unmitigating gall!

Congressman Gene Taylor's campaign website has this to say about the industry's buried clause.

In the aftermath of Hurricane Katrina, insurance companies purposefully and routinely denied homeowners payment for the wind damage that hurricane force winds had caused hours before the water ever arrived, wind damage that homeowner insurance policies should have covered.

State Farm's concurrent clause states "where wind acts concurrently with flooding to cause damage to the insured property, coverage for the loss exists only under flood coverage."

Taylor's website continues.

Insurance companies had buried in their policies a clause that they refer to “concurrent causation.” Insurance companies denied legitimate wind damage claims based on this buried clause. In effect, the concurrent causation clause said that after the four hours of hurricane force winds that hit the Gulf Coast before the water ever got here, if there was one 2x4 left standing and the water knocked it down, the insurance company would call the damage “concurrent”—meaning at the same time. The insurance company would then use the fact that water had also cause some damage to deny homeowners the right to be paid for the wind-related damage to their property.

AFTER all of this, the company now wants to put Katrina's families through some kind of inspection, provide proof of rebuilding, or be dropped for coverage. In plenty of cases, State Farm didn't bother to provide the money for all of the repairs that wind damage required much less the cost-of-living expenses those families incurred after the storm.

Some of that paltry sum of money it may have provided went to buy groceries to feed little Johnny or a few diapers for little Janie or perhaps some clothes for the elderly grandmother when hurricane winds blew her clothes all over South Louisiana.

A Hurricane Katrina victim leaves no doubt that he would like a visit by the State Farm insurance adjuster in Gulfport, Miss., last year. State Farm said Wednesday it will stop writing homeowner polices in Mississippi as fights a number of Katrina-related lawsuits.
Steve Helber / AP file

State Farm, which some around here call Snake Farm, has already stopped writing new policies in Mississippi. Now the company is moving on to our friends and family members in South Louisiana. Congressman Gene Taylor is so very right to equate insurance company execs with child molesters. I also hold in the same low esteem those who aid, abet, enable in substantial manner like their high priced fancy corporate lawyers and law firms dedicated to protecting and defending these two-fisted greedy gutted goons in Gucci suits.

Note: For an easy-to-read explanation, read Concurrent Causation: The Buried Clause in Homeowner Insurance Policies. More entertaining, though, is a short video excerpt from his Insurance Reform Town Hall meeting held last August in which Taylor explains this utterly inconceivable hidden clause that is the culprit of tremendous misery in the Katrina-ravaged region.

© 2008 Ana Maria Rosato. All rights reserved.
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