Post-Katrina Living: Making Do and Good Enough

by Ana Maria

It’s finally here! We have the date on which the contractor will arrive and do the next set of renovations to my mom’s home.

He’ll sand and seal the wood that hasn’t been touched in that way since my parents had the house built 45 years ago. Hang the doors to the bedrooms. Rework the closet doors. Create new doors for the utility room. Put up the crown molding on the ceiling and the floors. I think that about covers this next leg of returning to life BK—before Katrina.

When I arrived back in March, I was shocked at everything. From the total disappearance of so much of my home town here on the Mississippi Gulf Coast through the evaporation of nearly every home and business along the 40-50 miles of beach going east to Biloxi, which is as far as I’ve traveled that way. Then going west to see family in New Orleans was more of the same: destruction, devastation, disappearance, and evaporation.

Clearly, the PR campaign that the Bush Administration has going along with its counterpart in the Mississippi Governor’s Mansion via Haley Barbour doesn’t hold any water. Barbour is the former head of the national Republican Party and good friends with Bush. Naturally, they would support each other’s BS, I mean PR, campaign.

I’ve been here now five months. I have acclimated to a great deal and in ways no one could have convinced me that I would ever acclimate myself. Not that long ago, I was living in the lap of comparative luxury over there in San Jose, Calif.

I lived in a beautiful apartment inside a complex with three “sparkling pools” as its brochures like to brag, two tennis courts, two workout rooms, free tennis and yoga classes, and a sauna—actually two: one for women and one for men. Everything was convenient to my locale. Within a matter of minutes, I could be at any number of malls and full-sized grocery stores. Real grocery stores!

Safeway, Albertson’s, Whole Foods, Trader Joe’s, PW, Ranch 99—the large Asian food store chain. Plus there were a myriad of farm stands and plenty of smaller ethnic grocery stores. What joy! What bliss! Especially for someone like me that loves to cook and is damned good at it, too.

Today, I have Wal-Mart. In California, I protested with my union friends the atrocious employee policies that Wal-Mart uses. Today, it’s the only grocery around, and I’ve tempered my political preference for the reality life is currently presenting to my family, friends, and neighbors. Today, I go to Wal-Mart to get groceries and rarely think more than twice about it.

In my very first blog entry on the first of May, I wrote, “The best I’ve come up with is that many of life’s routine activities is like walking through glue . . . for miles on end.” That remains the best way I’ve come up with for describing post-Katrina life. As a current example, let’s talk about moving out of the house so the contractor can come in and work on it.

I called around to locate a hotel. Well, there aren’t that many. The one I wanted to book is literally 5 blocks from the house and would be great. It’s booked solid. Oh. We FINALLY get a contractor and his schedule and ours is permitting him to come fix up the house . . . and we can’t find a hotel nearby? I panicked.

Next, I called Hollywood Casino Hotel. It’s almost twice as expensive, and we would not have all the nights we would need. That won’t do. If I’m having to interrupt the routine for an elderly mother who is not in her prime physical condition--though she's sharp as a tack mentally, I want to get somewhere and stay put until we can come home. Nevertheless, I took the rooms I could.

Then, I called the lesser motel down the road a bit. Rooms are plentiful. Great! I booked them and then, I canceled the other reservations. My younger brother recommended that I actually look at the rooms., which I did. He was right. Not good enough.

My hotel hunting began all over again. There are limitations to what has been rebuilt and open for business. Finally, I settled at another casino hotel which is about 25 minutes from the house. There some interruption in our stay, but it is doable. It’s more than good enough for now. It has to be.

The story of post-Katrina life. Making do and good enough.

Personally, I am elated to be going to a hotel with extremely comfortable beds. Little furniture is in the house today. I’ve been sleeping on a twin-sized air mattress. A month ago, it sprung a leak. I repaired it . . . so I thought. I repaired it again. Better.

It would go like this for a few weeks toward the end of which I would find myself in the middle of the air mattress, squarely with my butt and back up against the wood floor. Finally, I gave up. If I’m going to end up on the floor anyway, I may as well just put myself there to begin with and quit waking up oddly contorted.

Believe me, in other circumstances, I would have gone out and bought another air mattress. Heck, in other circumstances, I would have gone out and bought the replacement mattress, set up the bed, and had myself some terrific sleep. If anything, however, these are extra-ordinary circumstances even some two years after the storm.

Back in April when I met the woman who turned me on to her contractor husband, I had thought everything would work out so he could get in here at the end of May at the latest. Then, I kept thinking a few more weeks, a few more weeks.

The whole time, I was slowly being baptized in the post-Katrina way things are. When I’d become agitated at something, I would think to myself, “This is only temporary. This, too, shall pass—quickly. I can handle anything for a little while.”

Or I would think, “I’ve only been at this since March. I can NOT imagine how it has been for those who’ve been back a year or those who actually went through the storm!”

So, when I found myself waking up in the middle of the night in contorted positions due to the deflation of my air mattress, I pulled out one of my old stand-bys and thought, “This is only temporary.” Of course, there is another part of me that says that things like this are part of my post-Katrina experience. My dues, as it were.

Going to a hotel room for a while will be a welcomed reprieve with its wonderful bed that will be heavenly to sleep on, I’m sure. (I’ve actually gone to the hotel and looked at the rooms. Gorgeous! A fabulous bed to sleep on--a new found luxury.)

See, there is no use in buying mattresses to replace the ones that had to be gotten rid of after Katrina had her way with the house. Why buy them and put them up only to have to move ‘em when the contractor gets here? It’s going to be harried enough with all the moving parts to prepping the house for the contractor without adding to the workload.

And so this is how I imagine many others from every walk of life have coped with the dysfunction that has characterized post-Katrina living. Whether finding the courage to go up against the insurance industry or dealing with a contractor that has taken money and failed to show up (a horror story that is far too common) or dealing with not finding a contractor to do the work in the first place, folks around here have more than perfected the art of making do.

Whether sleeping on the floor or putting up with the contamination that is inside the formaldehyde-filled, Barbie doll-sized FEMA trailers or dealing with insurance companies trying to rip off consumers by hiding behind false claims that the 135 plus mile-per-hour winds created not a smidgen of damage to a home or business, folks throughout the Katrina-ravaged region have invented new ways of defining good enough.

But these persistent conditions are not good enough. No one here should have to make do for two long years. It’s not right. As always, the question is how do we improve the situation? What can we do? What kind of political hell can we raise to shake things up and make things better?

Today’s Political Hell Raising Activity

''Fighting an insurance company is like staring down the wrong end of a cannon,'' Dr. Bennett said after fighting his insurance company in New Hampshire.

Dr. Bennett is so very right. We can change this and have the insurance industry itself staring down the wrong end of a cannon when it does its policyholders wrong. We have a great opportunity to impact insurance reform efforts this very month.

During August, our federal legislators are in their home districts. We can contact our Congressional representative and two U.S. Senators by phone or email and ask them to support two pieces of legislation to fix the problem going forward. Many lawmakers will be holding town hall meetings. Going to one and asking for their support is another option.

1. One policy: Wind and Water Insurance Coverage
At the same time, let’s continue to contact our federal legislators to support expanding the Federal Flood Insurance Program to include wind. Remember that the insurance industry begged off of its legal obligation to pay if so much as a smidgen of water came onto a property regardless of the damage that wind had caused. This is wrong.

We can make it so the post-Katrina experience doesn’t happen to other Americans. Informing our federal lawmakers that we support having one policy for both flood and wind coverage is how we remedy the situation for the future. That way future American families and businesses will not be required to make do unnecessarily.

2. The Insurance Industry Must Play By the Same Rules
Robbing us blindly with premiums for policies that they deliberately fail to make good on is, well, NOT good enough. So, let’s contact our federal lawmakers to ask for their support on the proposed legislation that would require the insurance industry to operate under the same rules as every other business in America. End its accidental 60-year exemption from laws governing price fixing and collusion.

That proposed legislation is S. 618 (in the Senate) and H.R. (in the House of Representatives). We must make the insurance industry play by the same rules as other businesses in the United States. This is fair.

Together, we can redefine what is good enough.



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Winds of Change in Hurricane Season

by Ana Maria

Today marks the beginning of hurricane season. I know. You thought hurricane season began June 1st. Locally inside Katrina Land, though, we think of hurricane season in terms of when the big storms have hit us, which historically have been in August and September.

• Hurricane Betsy hit New Orleans in September 1965.
• Camille hit the Mississippi Gulf Coast mid-August 1969.
• Katrina hit the Mississippi Gulf Coast on August 29th, 2005.

See the pattern? The hope, of course, is that if we are lucky enough to get to October without a major storm, the construction boom will begin, and a much more robust recovery will ensue. God, I sure hope the general perspective is accurate.

However, the biggest impediment to recovery remains the cost of insurance, as one Gulf Coast county chamber of commerce executive director said. The second impediment she mentioned is the lack of employees, which is brought on by the lack of available housing. Of course, housing is hindered by the lack of insurance: not paying the claims they owe policy holders, jacking up the costs, reducing coverage while jacking up the cost to policyholders, or cutting out of the area altogether. So, insurance remains the biggest impediment to recovery now as well as after this hurricane season blows over.

There we have it. Insurance is the big bugaboo to a vibrant, robust, rock-your-socks off post-Katrina recovery.

When I talked with a shop owner in New Orleans, she told me that neither the storm nor the levee breaks touched her store. Burglars looted it after the after levees were breached, and all chaos broke out across the city. Since then, her insurance carrier no longer offers wind insurance—only fire. Oh, it no longer offers her theft insurance—the only thing she needed to use after Katrina.

Thus the reason customers like yours truly, my niece and her little friend had to ring a door bell to get into the front door rather than the usual walking in off Magazine Street to see what kind of goodies we might like to buy. I don’t know about you, but I would imagine that installing a buzzer to let in customers may just be another barrier to a shop returning to business as usual. Another impediment to business brought to us by the good neighborly types in the insurance industry.

The industry’s pattern didn’t start with Katrina. No ma’am. For a number of years, businesses and homeowners in Florida have been suffering from this insurance affliction. Today, things remain, uh, grim. A few days ago, a Miami Herald article told a story that was quite revealing.

South Florida's business owners, like homeowners, aren't seeing relief from soaring windstorm rates.

What may be around the corner for them: rates that could double or even triple. Some insurers covering commercial property, including shops, restaurants, hotels and offices, have requested rate increases ranging from 142 percent to 225 percent. . . .

These come at a time when insurance at any price is still hard to find. The stakes are huge for South Florida's economy, fueled by thousands of small- and medium-sized companies already struggling with the slumping real estate market and high cost of living. Rising insurance premiums not only strain their balance sheets, the extra costs ripple into consumers' pockets.

Miami Herald
July 29, 2007

A taste of this week’s headlines in the Southeast—including Georgia and South Carolina—are equally telling of the state of insurance for business owners.

Alabama
• Study: Businesses hurt by rising insurance costs Mobile Press Register

Florida
• Florida's insurance crisis hitting businesses hard Miami Herald
• Little insurance relief for businesses Miami Herald
• Florida's biggest storm this summer might not be tropical. Insurance commissioner Kevin McCarty has seen the future of property insurance rates in Florida. And he's preparing for war. St. Petersburg Times
• At least that crisis is fixed - oh, wait ... St. Petersburg Times

Louisiana
• EDITORIAL: Don't gamble on coverage New Orleans Times Picayune

Mississippi
• Home insurance qualify of life issue for Coast Mississippi Press

South Carolina
• Rate hike to hit coast: Homeowners with wind pool insurance to pay an average of 35 percent more The State (Columbia, SC)
• Wind (pool) of change: State Insurance Department OKs 35 percent increase Charleston Post and Courier
• Bigger wind pool to show up in bills: Rates to increase by 35 percent on average Myrtle Beach Sun News
• Wind pool premiums to rise 35 percent (Hilton Head) Island Packet

The Winds of Change for Insurance Reform Picking Up
With the private insurance corporations abandoning American families and businesses en masse, the good news is that that business owners are hailing as a piece of much welcomed news the Multiple Peril Insurance Act that Gulf Coast Congressman Gene Taylor (D-MS) authored in the House of Representatives. Last week among party lines with only a few good Republicans joining the leadership of all the Democrats, the House Financial Services Committee passed the reauthorization bill for the National Flood Insurance Program which included the multiple peril insurance act on which Taylor has been working diligently.

The multiple peril insurance act follows the Democratic House rules of fiscal responsibility—a breath of fresh air after years of Republican spending like a bunch of drunken sailors. Speaker Pelosi demands that new legislation pay for itself, and Taylor’s bill does just that. So anyone who starts yammering to the contrary is, well, full of hot air. Thankfully, the winds of change for insurance reform are picking up speed.

A Miami Herald editorial stated, “One bit of potential good news: Insurance reform is on the Washington agenda.

Another Miami Herald piece reported

“A development last week in Washington could potentially help very small businesses. A U.S. House committee passed a bill that would extend the National Flood Insurance Program to include windstorm protection, although the proposed coverage limits for businesses are low. The bill faces stiff resistance from Republicans, insurers . . . and [r]elief can't come soon enough for many businesses.”

Little insurance relief for businesses
Businesses are finding little relief
in the commercial insurance market:
Rates are still high, and windstorm coverage is scarce.
Miami Herald
July 29, 200

Business owners, particularly small and medium-sized ones, are getting on board to push for insurance relief. These owners are a critical ally in our success to pass this important proposed legislation in the House of Representatives.

If either you or someone you know is a business owner or an employee of a small to medium-sized business, then by all means, mention this critical piece of information when contacting your congressional representatives. They need to know that the multiple peril insurance part of the bill has wide spread support from business owners as well as homeowners.

''Insurance is the oil that keeps the economy going. You couldn't build anything or run a business without it. But it's very frustrating now to find the coverage clients need.''

Pablo Conde
president of A&A Underwriters in Miami

Today’s political hell raising activities are to contact (again, if that is the case) our congressional representatives. When we do, we'll tell them we are voters in their districts. If we are a business owner or work for a small to medium sized business, let's be sure to mention it as well.

Heck, small businesses are the engine that runs our economy. Anything we do to keep those businesses running and keeping their employees on the payroll will assist in putting good food on the tables of America’s families. Having a well-fed nation of people is a good thing—inside and out of hurricane season.


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With Katrina's Wind at Our Backs, We're Blowing Through Congress!!

by Ana Maria

With a force seemingly more powerful than that of Katrina herself, the House of Representatives Financial Services Committee passed the Flood Insurance Reform and Modernization Act of 2007 keeping in tact the Multiple Peril Insurance Act that had recently been attached to it. In every day language, this means that the Democratically-controlled Congress just took a major step forward in protecting the 55% of Americans who live within 50 miles of the nation’s beautiful coastline. Score one for American families and businesses!


This began nearly two years ago with the insurance companies apparently devising a scheme though which to rip off Mr. and Ms. Home or Business Owners who had just been through the nightmarish Hurricane Katrina with her 22 tornadoes and winds at landfall that were at least 135 miles per hour. Katrina's winds beat down residences and businesses for up to three to four hours. Insurance companies like State Farm, Nationwide, and Allstate directed their agents that if so much as a smidgen of water were on the property to blame all the sustained damage on water.

Those directives and the subsequent documentation on how they were carried out are the foundation for the racketeering (RICO) lawsuit that the Scruggs Katrina Group filed against State Farm and its two corporate partners. [See State Farm, Partners, and RICO: What a Racket! It's another piece I did. You'll love it.]

ABC News was able to obtain a copy from State Farm files of the original FAEC [Forensic Analysis & Engineering Corp.] damage report, which included the image of an attached "Post-it" note that read, "Put in wind file - do not pay bill - do not discuss"

Image at ABC's The Blotter.

The agents for the federal government’s flood insurance program were the very same agents for State Farm, Nationwide, and Allstate and the like. Insurance companies handed down their directives: Do the paper work shuffle, leave your conscience at the door that Katrina blew away, and deliver the bad news to Mr. and Ms Home or Business Owners.

Routinely, the news went something like this.

Mr. and Ms. Homeowner, your wind policy on your homeowner’s insurance won’t pay for any damage. We want to keep to ourselves the $108 billion in profits our industry will make in 2005 and 2006. We have faith that you’ll be ok in spite of our reckless, selfish, irresponsible behavior. We’re greedy bastards who show up religiously at church. We’ll be praying for ya! Do I hear an amen! God bless.

Well, we have been blessed. We have Gulf Coast Representative Gene Taylor (D-MS), a heroic congressman who lost everything in Katrina, whose insurance company screwed over him and his family with failing to pay a penny before resorting to a lawsuit, whose own constituents were experiencing the same level of anguish that he and his family were experiencing.

We are blessed because Congressman Gene Taylor pulled out from the depths of his soul an indefatigable strength to carry on personally and professionally to champion this cause to ensure that America’s families and businesses all over the country never again are exposed to the ravages of corporate greed that has become so apparent in our nation’s insurance industry. To that I say Amen!

President Bill Clinton said something along these lines, “There isn’t anything wrong with America that can’t be made better by what’s right with America.” What is happening with this insurance reform bill is a fantastic example of Clinton’s wise words.

We are blessed because down here in Katrina Land, we reflect the rich tapestry that makes our nation envied the world over. We are of African, European, and Asian descent. We come from Central and South America. Our music is lively and soulful. Our food is hot, strong, and spicy. Our determination to persevere is strong.

To achieve the justice that every home and business owner in America requires in the aftermath of a natural disaster will require that all of us remain determined to persevere through the laborious and slow legislative process that is our form our government.

We can achieve this. The first step is to believe we deserve it. We do deserve it, and now we must embrace that very idea. The second is to believe that it is possible. We have proof that it is. The vote in subcommittee last week—along party lines, I might add, and the vote yesterday—again along party lines with a few conscientious Republicans joining the leadership of every Democrat on the committee. We have achieved step two.

The next step is to take concerted steps in the direction of this legislative dream. You know what that means! It’s political hell raising time. Woohoo! The very next vote will be in the entire chamber of the House of Representatives. It could be as soon as next week before the congress breaks for its August recess. We can say that to achieve our political dreams, we must engage in a bit of political hell raising. What fun!

In the aftermath of Katrina, with the malice of forethought the insurance industry engaged in deceptive practices intent to steal from American home and business owners the benefits that they had paid to have. Through our own political hell raising, we can end the deceptive financial charade of the insurance industry.

We must contact our own congressional representatives and let him or her know that we support the Flood Insurance Reform and Modernization Act of 2007 ESPECIALLY because it includes the Multiple Peril Insurance Act which protects America’s families and businesses.

Sharing our perspective on this critical matter is how we protect our families through expanding the flood insurance program to include wind coverage. Sharing our perspective is how we put a gust of powerful wind under our political sails—and sail into the next round of legislative victories for ourselves, our families, and our businesses.

[Here are political hell raising email and phone activities.]

If you enjoyed this, you may also wish to read . . .
Bookies, Pimps, and Insurance Companies.
Commercial insurance rates will crush small businesses

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Taylor, insurers lock horns over bill

In the end, Taylor's bill is the only viable proposal
Posted on Sun Herald Wed, Jul. 18, 2007





J. SCOTT APPLEWHITE/THE ASSOCIATED PRESS
Rep. Gene Taylor, D-Miss., listens to opening remarks on Capitol Hill in Washington on Tuesday during a hearing of the House Housing and Community Opportunity subcommittee, as they consider the Multiple Peril Insurance Act of 2007.

By BRANDON PARKER
SUN HERALD WASHINGTON BUREAU

WASHINGTON -- One by one, representatives of insurance companies lined up along a crowded testimony table Tuesday to criticize a proposal to create a federal hurricane coverage program before a House subcommittee.

But after three hours of testimony, Rep. Gene Taylor's bill to add coverage for wind damage to the federally funded National Flood Insurance Program stood as the only viable proposal for insurance reform to protect against property losses like those from Hurricane Katrina.

Taylor says that insurers overcharged the NFIP for the property claims submitted by Gulf Coast residents after Katrina. Damage caused by flooding is covered by the NFIP, whereas insurers must cover wind damage under homeowners' policies. Taylor maintains that many companies took advantage of the NFIP, leading to the program's $17.5 billion deficit.

"Greed is the main disconnect in this situation," said Taylor, D-Miss. "It's easy for them to walk around in their Gucci suits and defend their companies, but the reality is down there on the Gulf Coast, where all of the destroyed homes and property of my constituents are. Of course, these companies don't want to change the rules that are currently in their favor.

"People who played by the rules and expected insurance companies to play by the same rules got screwed," said Taylor, whose bill would create financially sound premium levels to make the NFIP self-supporting.

But insurance industry representatives raised red flags about the costs of the proposal.

Ted Majewski, who represented the American Insurance Association, noted a company analysis that concluded Taylor's bill could increase the NFIP deficits by up to $200 billion in one year.

Furthermore, said Robert Hartwig, president of the Insurance Information Institute, the artificially low government coverage rates would encourage development in flood- and wind-prone areas by homeowners, who typically have insufficient catastrophe insurance.

He also pointed out that fewer than 20 percent of South Mississippi homeowners had flood insurance prior to Katrina and questioned whether homeowners would participate in the bill's voluntary federal program for wind and flood damage protection.

"The proposal's actuarially sound rates still do not address the lack of flood coverage penetration," said Hartwig. "It's not what will happen to the private sector, but what will happen to citizens and their taxpayer money."

Despite the concerns voiced by industry representatives Tuesday, Allstate and Nationwide insurance companies have sent letters to Congress calling for an expansion of the federal government's role in catastrophe insurance.

And the chairwoman of the committee, Rep. Maxine Water, D-Calif., chastised the insurance industry representatives for criticizing Taylor's plan without offering a solution to reform the NFIP to add wind damage protection.

Taylor hopes to see the bill approved by the House committee and sent to the full House for a vote before the August recess.

Original Sun Herald article here.

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Summary of H.R. 920, the Multiple Peril Insurance Act

From the Office of Rep. Gene Taylor

Cosponsors: Maxine Waters, D-CA; Bobby Jindal, R-LA; Charlie Melancon, D-LA; Walter Jones, Jr. R-NC; William Jefferson, D-LA; Jo Bonner, R-AL; Carolyn Maloney, D-NY; Emanuel Cleaver, D-MO; Al Green, D-TX; Wm. Lacy Clay, D-MO; Edward Markey, D-MA; Lincoln Davis, D-TN; Rodney Alexander, R-LA; Donna Christensen, D-VI; Bennie Thompson, D-MS; Henry Cuellar, D-TX; Danny Davis, D-IL; Neil Abercrombie, D-HI; Jeff Miller, R-FL; Timothy Bishop, D-NY; Sheila Jackson-Lee, D-TX; Alcee Hastings, D-FL; Carolyn C. Kilpatrick, D-MI; Donald Payne, D-NJ; Corrine Brown, D-FL; Loretta Sanchez, D-CA; Steve Cohen, D-TN.

H.R. 920, the Multiple Peril Insurance Act, would create a new program in the National Flood Insurance Program to enable the purchase of wind and flood risk in one policy.

The bill requires premiums for the new optional coverage to be risk-based and actuarially sound, so that the program would be required to collect enough in premiums to pay claims.

Multiple peril policies would be available where local governments agree to adopt and enforce building codes and standards designed to minimize wind damage, in addition to the existing flood program requirements for flood plain management.

Any community participating in the flood insurance program could opt into the multiple peril option, but the greatest demand for the product will be in coastal areas that face both flood and wind risk from hurricanes and tropical storms. Insurance companies are withdrawing from coastal areas and forcing state-sponsored insurers of last resort to take on much more disaster risk.

The Multiple Peril Insurance Act would allow homeowners to buy insurance and know that their damage from both wind and water will be covered. This is primarily a concern after a hurricane where the worst destruction is caused by a combination of wind and flooding. Homeowners would not have to hire lawyers, engineers, and adjusters to determine what damage was caused by wind and what was caused by flooding.

This bill would set residential policy limits at $500,000 for the structure and $150,000 for contents and loss of use. Nonresidential properties could be covered to $1,000,000 for structure and $750,000 for contents and business interruption.

Once the program is enacted, a private insurance market should develop to offer coverage above the limits. This would allow insurance companies to design policies that would have the equivalent of a $500,000 deductible for residential properties or a $1 million deductible for nonresidential properties.

Section by Section of H.R. 920,
the Multiple Peril Insurance Act

Section 1. Short Title

“Multiple Peril Insurance Act of 2007”

Section 2. Flood and Windstorm Multi-peril Coverage

Adds a new program to the National Flood Insurance Program to enable the
purchase of insurance covering losses resulting from flood and/or windstorm;

Multi-peril coverage is available only where the local government has adopted standards designed to reduce windstorm damages; (Flood standards already required by NFIP)

No duplicate coverage with multi-peril coverage and NFIP flood coverage;

Multi-peril policy covers damage from flooding and/or windstorm without requirement to distinguish flood damage from wind damage;

Premiums must be based on risks according to accepted actuarial principles;

The Director shall issue regulations setting the terms and conditions of coverage;

Aggregate policy limits are as follows:

Residential Structures - $500,000 for single-family dwelling; $500,000 per dwelling unit for structures with more than one unit; $150,000 per unit for combination of contents and increased living expenses for loss of use;

• Nonresidential Structures - $1,000,000 for structure; $750,000 for combination of contents and business interruption coverage.

Section 3. Prohibition Against Duplicate Coverage

Adds the prohibition against duplicate coverage to the existing flood program.

Section 4. Compliance with State and Local Law

No new coverage for any property that is in violation of local building and zoning
requirements designed to reduce windstorm damages.

Section 5. Criteria for Land Management and Use

The Director shall carry out studies to determine the appropriate standards for windstorm damage prevention, and establish criteria based on those standards.

Section 6. Definitions

Windstorm is defined as any hurricane, tornado, cyclone, typhoon, or other wind event.



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State Farm, Partners, and RICO: What a Racket!

[At end of this piece are additional resources on the RICO case including a video of the press conference annoucing this historical lawsuit.]

I’m not talking tennis either. The whirlwind of news swirling about is almost dizzying. Shortly after Katrina hit the Mississippi Gulf Coast and breached the New Orleans’ levees, rumors floated around implying that the insurance companies would rig their claims process to wiggle out of paying what was owed to Paula and Peter Policyholders.

I thought to myself how criminal and cruel, heartless and calculating the people running a corporation would have to be to actually pull off something like this.

I envisioned a set of companies passing back and forth among themselves responsibility for the Katrina claims. I had thought this would be a way to shift its costs to other companies depending on which of them had the flood insurance policies. I was unaware that the private insurance corporations had bailed out of the flood insurance business some forty years ago.

I didn’t realize that our U.S. Government was taking care of what the private market neglected. When corporations failed to fill the market needs of American families and business owners, the federal government stepped in. Indeed, a lesson in the absurdity of arguing in favor of straight up laissez faire economics.

What I had envisioned was in the right direction of what occurred. I just didn’t realize that the US taxpayers would get stuck with the private corporations’ bill.

Courageous Whistleblowers Step Forward
Thankfully, two courageous women—Cori and Kerri Rigsby—blew the whistle on what has turned out to be a scenario worse than imagined. These very brave Rigsby sisters came forward with evidence that allegedly proves that State Farm defrauded policyholders by manipulating engineers' reports so that claims could be denied.

Photo of Cori and Kerri Rigsby

ABC News was able to obtain a copy from State Farm files of the original FAEC damage report, which included the image of an attached "Post-it" note that read, "Put in wind file - do not pay bill - do not discuss"

Below is a post it note on a file that appears to embody the essence of the allegations.

Cori and Kerri Rigsby turned to attorney Richard Scruggs to represent them. A few years back, Scruggs had won his fight against Big Tobacco costing the cigarette industry a “$246 billion settlement to help states defray Medicaid costs for smoking-related illnesses.”

The sisters say they ultimately printed out and copied roughly 15,000 pages of claims records. In addition to providing the material to Scruggs, they say they gave copies to Mississippi Attorney General Jim Hood and U.S. Attorney Dunn Lampton's offices on June 5, the same day they told a supervisor they were cooperating with Scruggs. For eight years, Cori and Kerri Rigby had managed State Farm claims adjuster teams.

Of course, State Farm is doing everything it can to suppress the use of this information in any legal proceeding. Doesn’t this sound just like they took a page straight out of the playbook for their Republican buddies in the White House?

Remember how the Administration went ballistic when we learned that someone in Bush’s employ had leaked the identity of CIA undercover operative? The White House wasn’t upset that someone had betrayed the country and put at risk Valerie Plame’s life and all those with whom she was associated as well as compromised her work on weapons of mass destruction. No ma’am. Bush and his team were upset that they had been caught. Well, this is the same game State Farm seems to be playing.

Racketeering
On Wednesday, June 20,2007, the Scruggs Katrina Group filed a federal lawsuit against State Farm and its corporate partners alleging the corporations were violating the Racketeer Influenced Corrupt Organization Act, which most of us have heard of as RICO. State Farm worked with “Forensic Analysis & Engineering Corp. of Raleigh, N.C., and E.A. Renfroe Co. Inc. of Hoover, Ala. Forensic's engineers inspected homes for State Farm, while Renfroe helped the company adjust claims.”

The Scruggs Katrina Group characterized the complaint as "a story of how State Farm and its web of surrogate companies conspired to deny claims that should be paid by State Farm and to shift liability to the federal-funded flood insurance program. Actions taken by State Farm and conspirators included:

• threatening experts who disagreed with their desired result
• concealing information that would work in the policyholder's favor destroying or falsifying reports
• placing pressure on engineers to use scientifically inaccurate and deceptive language
• firing engineers who refused to be corrupted inventing a new policy to exclude all hurricane damage
• using their strength and size to intimidate policyholders in the mediation process

My God alive! Racketeering charges against an insurance company that is known for its jingle claiming “just like a good neighbor, State Farm is there.”

“I've never seen a smoking gun this good, even in the tobacco litigation when I'd thought I'd seen it all,” Scruggs said in an interview. “They collaborated to defeat valid homeowner claims through rigged engineering reports and biased adjusting.”

Boy oh boy. This is sounding more and more like the Bush Administration’s kind of friends. For an analysis of the obscene amount of money the insurance industry invests in Republican candidates, see Soaking U.S. Taxpayers.

Where’s the Federal Probe?
The Rigsby sisters had turned over their documentation to both the state attorney general and the U.S. Attorney. Just over a week ago, Mississippi’s Attorney General Jim Hood, a good Democrat, filed a lawsuit against State Farm for breach of contract. [See State Farm Paying Attorney Fee for Miss. Insurance Commissioner]. As part of that contract, Hood had agreed to drop the state’s criminal probe into State Farm. With State Farm’s alleged breach, Hood has not ruled out reopening the criminal probe.

The Sun Herald reported that the U.S. Attorney’s Office has subpoenaed records from Nationwide Insurance, State Farm, and Allstate. The paper also reported “records indicate a grand jury is hearing evidence. Grand jury proceedings are secret and don't necessarily result in criminal charges.”

I feel the public is in good hands with Attorney General Jim Hood and attorney groups like the Scruggs Katrina Group. But I have reservations when it comes to the federal probe.

In September 2001, George W. Bush appointed Dunn Lampton, a Republican, as U.S. Attorney for the Southern District of Mississippi. The Clarion-Ledger reported that Lampton was allegedly on a White House 2005 hit list for canning U.S. Attorneys. When asked why he would be on the list, Lampton said, “I don’t have a clue.”

How’s about this for a clue, Mr. Lampton? Your office has subpoenaed documents from three of the big insurance companies: State Farm, Allstate, and Nationwide. Your office has convened a grand jury in the federal probe of these companies … and if that isn’t plenty enough, you just successfully concluded the criminal conviction of “reputed Klansman James Ford Seale [for] kidnapping and conspiracy in the 1964 deaths of two black teenagers in southwest Mississippi.”

I applaud you for bringing justice to the families who have endured immense and unthinkable pain for the last 33 years. Bush’s lapdog Gonzales and his minions found out that you were not one of them. I’m quite sure that the compassionless folks in the White House do not share your sense of justice, your values. I think it’s probably quite safe to say that you are a bit out of sync with the Republican leadership, and once again, for this, I applaud you. You have brought justice to these families and a sense of closure for their wounds.

I hope that you will pursue with equal vigor your probe into the alleged criminal behavior of the corporations that have brought a different kind of unthinkable pain and suffering to the families of all racial and ethnic backgrounds here along the Mississippi Gulf Coast.

To top it all off, Mr. Lampton, you’ve stirred up a hornets nest with pursuing a public campaign for gun control. Bravely, you yourself were featured in this public service television spot. As I’ve already stated twice and now shall do so for a third time, I applaud you, Mr. Lampton. This was the right thing to do. However, the Bushies do not share your values, sir. Even though you are a Republican, this may be yet another reason that your name was on Gonzales’ hit list for the political purging of the Justice department.

Be strong, Mr. Lampton. The people of South Mississippi, and for that matter throughout this country, need an honest to God federal investigation into the insurance racket.

Whether it’s the White House once again squirming out of taking responsibility for its own wrongdoing in the political firings of U.S. Attorneys or one of the Bush Administration’s partner industries spinning its PR to cover up their corporate corruption, we need strong public leadership.

What the insurance companies have done to the people of Mississippi and New Orleans will continue to happen to anyone of us anywhere in the country until we bring together every resource to end what is essentially a legal mob ring.

While the legal eagles are taking care of their responsibilities in our grand democratic scheme of government, we can also do our part to put all of our families on safer ground after natural disasters.

Since the insurance companies are obviously bowing out of taking care of the customers, the ultimate remedy is to expand the federal government’s flood insurance program to include all natural perils. Gulf Coast Congressman Gene Taylor (D-MS) introduced the Multiple Peril Insurance Act of 2007. (The bill is H.R. 920.)We can partner with Congressman Taylor to take the wind out of the insurance industry. You know what that means! It's political hell raising time again. We can call and email our own congressional representatives to request that they co-sponsor the Multiple Peril Insurance Act of 2007.

Taking these steps is how we begin to break up this insurance racket so that each of us and our families will truly be in good hands.

__________________________________________________________

Watch the press conference (Quicktime) high-res low-res
Download and install Quicktime to view videos .

Press Release Statement of Atty. Don Barrett
Summary of the case (PDF) Concise Statement (PDF)
Court Documents: Shows vs. State Farm
Original Complaint (PDF) Exhibits (PDF) Note: These are large files and may take over a minute to load.

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Wind? Water? More like a Bunch of Hot Air!

Ever since the last drop of Katrina rain passed through the Gulf Coast and the water receded after the levees burst in New Orleans, the insurance industry has been hell bent on implementing at full throttle its great American rip off program. In no time flat did those who had likened their company to good neighbors or to the security of being in good hands issue written instructions on how to maximize what seems to have been their goal: blame Katrina’s damage on flooding.

Let me help the insurance industry become crystal clear on this point. This was a H-U-R-R-I-C-A-N-E! We didn’t call this Katrina, the flood. We didn’t call this Katrina, the tornado. We didn’t call this Katrina, the storm surge. Everybody calls it . . . H-U-R-R-I-C-A-N-E Katrina. Capiche? Now let’s get technical.

The National Oceanic and Atmosphere Administration (NOAO) states on its hurricane preparedness website that “[h]urricane hazards come in many forms: storm surge, high winds, tornadoes, and flooding.”

In other words, a hurricane is a natural disaster consisting of both wind and water. How does one slice and dice the impact of one on the other and the amount of damage directly attributable to each?

Gulf Coast Congressman Gene Taylor (D-MS) testified before Congress that insurance companies were choosing not to pay on claims unless the policy holder provided an eye witness. [See Video: Katrina Insurance Claims Hearing: Rep. Taylor Testimony on the homepage of A.M. in the Morning!]

Can you believe this?! Unethical,? Of course. Heartless? Obviously. Ruthless? Evidently. Maniacal and Evil? Absolutely.

Stupid? No. These corporate execs who made the decision to blame Katrina’s damage on water comes out of value system foreign to most of us of any religious or spiritual background. Seems these execs live in a decency-free bubble where their god, the Almighty Dollar, reigns supreme. There will be no conversions. So, forget any lofty notions of that sort.

What we need are two things. First, we must fully understand how they are getting away with this horrendous travesty. Second, we must understand and implement what we can do to prevent its continuation.

Look, they know how to play us and play the politicians. Moreover, they know how to take advantage of the conflicts of interest that are inherent in the U.S. Government’s National Flood Insurance Program (NFIP).

Yesterday’s piece titled Scamming Policyholders & Taxpayers reported that our federal government has been in the flood insurance business since 1968. The private insurance companies pretty much got out of the flood insurance business “because of the catastrophic and unpredictable nature of floods.” In 1983, the federal government turned over to the private insurance industry the selling, servicing, and adjusting of those policies and claims. This may have been a fine arrangement for those natural disasters that dealt with floods only.

However, when it comes to a hurricane which by its very nature simultaneously involves several types of natural calamities such as storm surge, high winds, tornadoes, and flooding, a conflict of interest rises when it is the private insurance companies that are determining whether damage would be covered by them or by the federal taxpayers. In this instance, the conflict of interest is $23 billion.

So far, claims paid out on Katrina add up to $64 billion— and this amount only accounts for those who’ve been paid on their claims through 2006. By the end of last year, the private insurance companies had paid $41 billion. These same companies essentially handed a $23 billion bill to American taxpayers for damages that these private companies determined flood waters had caused. How generous that the private insurance industry only stiffed us for 36% of the bill.

What a racket! But could companies really be that methodically maniacal to stiff its own customers and the American taxpayers to the tune of at least $23 billion?!

On his official government website, Gulf Coast Congressman Gene Taylor (D-MS) has an incredible collection of “documents that suggest fraud by insurance companies in the handling of Katrina wind and water claims.” The doozies below are from Nationwide, State Farm, and Allstate.

9/4/2005: Nationwide instructed its adjusters that “if loss is caused by both flood and wind there is no coverage.”

9/13/2005: State Farm instructed adjusters that “where wind acts concurrently with flooding to cause damage to the insured property, coverage for the loss exists only under flood coverage.”

6/28/2006: On-site damage assessment by engineer Jerome Quintero of Rimkus Consulting Group for Allstate… concluded that there was “insufficient physical evidence to determine the proportion of wind versus storm surge that destroyed the structure.”

11/4/2005: Jerome Quintero’s damage assessment after revision by Rimkus staff who never visited the site. Quintero’s conclusion of “insufficient physical evidence” was changed to “storm surge and waves destroyed the residence.” Quintero’s name was signed to the revised report without his knowledge.

So there we have it. In the three examples, Nationwide, State Farm, and Allstate seem to be essentially instructing its adjusters to blame Hurricane Katrina’s damage on water alone thereby sticking the American taxpayers with an inflated $23 billion bill.

We haven’t even begun to talk about the rebuilding costs that weren’t covered at all or the folks who didn’t have flood insurance because they believed their policy provided adequate coverage. We haven’t touched on the fact that many like my own family are not in an official flood zone and may not have purchased flood insurance.

What is important, though, is to recognize that what the insurance companies are doing to New Orleans and the Mississippi Gulf Coast can happen to over half the population of our country.

“Populations and built environments in coastal watersheds are growing rapidly, with 55 percent of the U.S. population already living within 50 miles of the coast.”

“The Coastal Community Development Partnership”

National Oceanic and Atmospheric Administration (NOAA)

The Coastal Community Development Partnership brings together NOAA and EPA offices to better support state and local governments as they promote safer and smarter development along the coast.



The name of the game is to be informed and to take action.

Yesterday, we discussed the need to eliminate the insurance industry’s exemption from the anti-trust law governing business throughout our country. Right now, the Senate is considering the Insurance Industry Competition Act (S. 618), which will make it illegal for the insurance companies to collude with each other for things like price fixing and claims adjustment. Go here to tell your two U.S. Senators that you support the Insurance Industry Competition Act.

Today, we take action to protect ourselves from the inherent conflict of interest created because the insurance industry gets to determine for our federal government the amount of damage allegedly attributable to flooding at the same time the private insurance industry is determining the damage at the same property that it will attribute to wind.

Congressman Taylor has introduced H.R. 920, which amends the National Flood Insurance Program. In his testimony before Congress, he stated, “in response to the fact that the insurance industry apparently no longer wants to over people for wind damage in coastal America, or will not provide that coverage at a cost that is reasonable, I am asking you to consider legislation that will expand the National Flood Insurance Program to include all natural perils.”

Taylor explains that under the rules of the House of Representatives, the insurance plan would have to be financed in a way that pays for itself. “Thus, any argument that this would be taxpayer-subsidized would be eliminated. Under the new rules of the House, that is not an option.” What Taylor is referring to is that when the Democrats were swept into office last November, Speaker of the House Nancy Pelosi instituted strong fiscal controls on spending. She ended the fiscally irresponsible era under Republican leadership.

Lastly, Taylor stated, “This problem affects thousands of people. Quite frankly, people should be encouraged to get out of coastal areas in a time of a storm, rather than encouraged to stick behind with a camera to record the event.” Amen to that!

Speaking of the Amen Corner, former Congressional Speaker of the House Newt Gingrich (R-GA), that compassionless conservative crony, has already come out against national disaster insurance. What a shock! The only thing those so-called conservatives are interested in is conserving their power.

During the apex of his reign in Congress, Gingrich accepted almost $425,000 in political contributions from the insurance industry coffers. Newt being a mouthpiece for an industry that has so blazingly betrayed the American people and her families isn’t all that shocking these days.
And just as the wind got knocked out Newt’s political sails, we can partner with Congressman Taylor to take the wind out of the insurance industry’s selling to us wind insurance policies on which they fail to appropriately pay out after a natural disaster.

Today, we can call and email our congressional representatives to request that they co-sponsor H.R.920, which is called the Multiple Peril Insurance Act of 2007.

After all, the more this private industry continues to push their wind vs. water rationale, the more it sounds like nothing more than a bunch of hot air.

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