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By commonscribe
(a wonderful writer on DailyKos)
I've recently returned from a week in Bay Saint Louis. These are more thoughts on what I found there.
Read this well-written and heart breaking story on Daily Kos. . . (then come back!)
by Ana Maria
The insurance industry has a great scam of a gravy train going on with home and business owners. Think about it. Collect the premiums, deliberately fail to pay out the claims, pocket the profits, leave town, reduce the coverage, increase the premiums, repeat.
Just as a bookie collects from its gamblers, these companies collect money from us, the home and business owners of America. If we never have a situation where we need to make good on our policy, the insurance company has kind of made out like a bandit. All of this is legal and above board. We understand it’s a form of legal gambling, and we know the risks of what may happen if we don’t participate.
In essence, we’re essentially betting that we may one day need to tap into our policy, our legally biding contractual agreement with our legal bookie. When something happens and we need our gamble to pay off, we expect our insurance carriers—our bookies—to make good on our legally binding agreement.
Here in the Katrina-ravaged region of the country, our bookies are skipping town with our money pointing their proverbial fingers to the water in the Gulf of Mexico. If a drop of water hit our property, then the insurance carriers said that ALL of the damage would be paid from the U.S. Government’s federal flood insurance program. Remember, the private insurance companies were adjusting claims for their own wind insurance policies and for the federal government’s flood insurance program. A conflict of interest that has become apparent in Katrina’s aftermath. [See Wind? Water? More like a Bunch of Hot Air! for more information on that end.]
Since the private insurance carriers were adjusters for the same properties and these companies lack integrity or ethics, it was easy for them to fraudulently claim that the damage was from water and to hand their own bills to the U.S. government to the tune of $23 billion. With each home and business owner claim that these companies fraudulently denied, they have betrayed our trust.
New research from the University of South Alabama’s Coastal Weather Research Center is proving that the insurance industry’s profit generating plan doesn’t hold water.
Winds battered residents long before water came ashore. This past May, the university announced the discovery of a “Second, Devastating Eyewall Inside Hurricane Katrina”. The university’s “hurricane expert Dr. Keith Blackwell used the latest in microwave satellite technology to look inside Hurricane Katrina’s storm clouds, leading to the discovery of a second, or outer, very potent eyewall, which extended severe hurricane winds far outward from the storm’s center.
Blackwell’s research concluded the following.
“Initially, high winds in the outer eyewall struck the Mississippi coast up to three to four hours before the highest water arrived. The problem with water created by the storm’s devastating tidal surge arrived later,” explained Blackwell.What does this mean?
[Emphasis added.]
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;
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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As I sit here in the town of Bay St. Louis, Miss., one of several tiny coastal beach towns that comprise ground zero for the worst part of the worst natural disaster in the nation, I feel conflicted. The New York Times has published a lengthy article titled Road to New Life After Katrina Is Closed to Many. The article zeroed in on the difficulty of returning home after Katrina. Again, as has been the modus operandi from the beginning, the focus is on New Orleans alone and specifically on residents in the 9th Ward. This is an important heart breaking story. And herein lies my conflict.
The road home after Katrina is equally difficult for those who don’t live in the lower 9th Ward. A few weeks ago, I attended my niece’s 13th birthday party held at Rock ‘n Bowl in New Orleans. How wonderful to see a bunch of 13 year girls so confident, delightful, and vibrant. Their parents dropped them off, stuck around a while and chatted, then left and returned to pick them up when the party ended. One of the mother’s I met was yakking with me about having to go to the laundry mat. In New Orleans, “to yak” means “to talk.” Let’s get some cross cultural adaptation going here, ok? ;) Back to the yakking itself, she was so lovely. She and her husband’s home in Lakeview had many feet of water in it after the U.S. Army Corps of Engineers’ levees broke. Fortunately, they were able to buy a home a few blocks away that was untouched by the water.
Anyway, she was saying how awful it was for her because since the storm, she’s been having to go to the laundry mat to do the clothes. “At THIS age? Girl, you know, I didn’t work all my life to be going to a laundry mat to do my families clothes.” Oooooo. I told her that when I moved back to San Jose, California in 2002, one of my main criteria for renting was having a washer and dryer in my apartment. Period. I was not going to drag my clothes over to a laundry mat and sit there for hours waiting for a dryer, getting stuck using a dryer that hardly dried the clothes and ate up my coins like mad. And I’m only one person. I couldn’t imagine doing it for a family—mom, dad, and kids.
Now what does any of this have to do with a New York Times story about the 9th Ward and going home to New Orleans? My recent five part series focused on broadening the Katrina lens beyond it. The woman with whom I was speaking—I wish I could remember her name. It’s a terrible thing, I know, to not recall someone’s name. But, down here in the greater New Orleans area, which includes the very western part of the Mississippi Gulf Coast and in particular the towns of Waveland and Bay St. Louis (my home town, remember), we don’t remember names that well. Often, we’ll say something along these lines. “You remember the son of Ms Josie who is married to that beautiful woman whose sister works at the bank? Well her mamma’s good looking brother . . .” Not recalling people’s names may be the reason everyone calls everyone honey, baby, dahlin’, shuga, and sweetie.
A few years back, Bob, a boss of mine was going to New Orleans for some kind of work thing. I told him of this delightful cultural verbal habit of ours. Bob came back complaining that I had forgotten to tell him about the mosquitoes and gnats. Poor thing, his neck was raw from the bites. But, he perked up when he said that I was right. Even the big burly man behind the counter of a sandwich shop where Bob had gone for lunch called him “hon.” That’s part of the charm of the area. We don’t care if you really are good looking or ugly, fat or thin, old or young, or your race, ethnicity, or religion. If you talk with the locals, you’ll be called one of the terms named above.
Now where was I on that laundry mat story. Oh yeah. So, the woman with whom I was speaking? She and her husband live in Lakeview, which is the affluent neighborhood that is on the exact opposite economic spectrum of the 9th Ward. One other thing. She and her family are African American.
The media has not sufficiently told the story of the incredible hardships of the road home for New Orleans residents outside of the 9th Ward. And their hardships and stories are also important to know to understand the barriers to a full, vibrant and quick recovery.
Residential Contractors, a Scarce Commodity
Contractors are very, very difficult to come by. Finding a Contractor Like California Dreamin’ tells my mom’s story of looking for contractors to repair her home. The Times-Picayune, the daily paper in New Orleans, ran a story titled A Clog in the Line which told of the incredible hardship in finding a plumber in New Orleans. Over 18 months ago, my own brother bought a brand new hot water heater that he needed to install in his home. He has paid plumbers to come out to do the work, they didn’t show. He has asked others for quotes and they tell him, “We don’t give quotes, we give bills.” What?!
Clearly, the terse delivery of the message is rude and carries an arrogance that is unhelpful in this Katrina area where doing everyday normal things—such as getting a quote for installing a hot water heater—is like walking through glue. Only after many, many months of enduring this ridiculous lack of business etiquette did he learn that what plumbers are finding is that when they go into do a simple, routine job, one pipe after the other begins to crumble and fall apart. And so giving an accurate quote becomes incredibly difficult for the plumbers.
If I recall correctly, and I’m not sure that I do, the reason for the pipes crumbling is because the salt in the water that flooded the homes corroded the pipes. Something like that. It’s all Katrina related. That’s no excuse for the rudeness. Since the licensing process takes a few years to obtain in Louisiana, plumbers from other parts of the country who would love to donate their talent are prohibited from doing so.
The courts, jails, and child support
Recently, a friend of mine was telling me that she finally hauled her ex into court for his failure to pay child support. Life is tough anyway here in Katrina Land. Raising kids without the financial assistance of their dad makes life tougher. So what happened once they got to court? Well, under pre-Katrina days, he would have been put in jail. However, we don’t have a jail to put him in. He got a free pass for a few months. Without the leverage of jail time, this takes the teeth out of child support enforcement for those situations that require it.
So what’s my point?
The ravages of post-Katrina life in New Orleans and here on the Gulf Coast are difficult to manage. The impact is broad, wide, and deep. The impact of insurance companies like State Farm, Allstate, and Nationwide that apparently deliberately fail to live up to their financial contract on the wind policies of their homeowner customers is keeping money out of the very hands that need it to rebuild, to return home. For those that have some money to repair their homes and businesses, getting good contractors is an exceedingly rare commodity. Without money flowing into the city and county coffers be it from FEMA or insurance companies or tax revenues, local and county governments cannot rebuild basic buildings such as schools to educate children and jails into which to incarcerate parents who are deliberately failing to live up to their financial obligations to their kids even when they do have these financial resources.
That’s my point. Reputable media outlets like the New York Times must tell the whole story of the challenges that post Katrina life presents. From a strictly political perspective, this is how we bring about recovery faster. The more varied the stories, the more the entire picture becomes clear, the greater the opportunity for momentum to build. That is what is needed most of all: momentum outside of the Katrina-ravaged region regarding everything from Insurance companies failing to pay out on legitimate claims . . . to governments not being able to build schools and jails . . . to homeowners not getting the plumbers and other contractors they need . . . to building low income housing in the 9th Ward and throughout the rest of the Katrina area. This is a broader lens through which to see what needs to be done and what can be done to speed up a vibrant recovery.
Today’s political hell raising activity targets the New York Times. Let’s call and write the paper thanking them for investing the time and money to write the story and devoting the enormous amount of space in the paper itself to raise awareness about the continuing challenges of getting home after Katrina. When we talk with or email the paper, we’ll be asking the editors to broaden their lens to include the plight of those in the rest of New Orleans, its surrounding Louisiana cities, and the entire Mississippi Gulf Coast. We’ll again thank them for providing coverage to something that is important to healing the wounds of Katrina and the pathetic circumstances that the insurance companies’ failure to properly fund and the White House failure to provide appropriate leadership has created.
In this way, we’ll praise their coverage and encourage more articles as we direct their attention to additional stories they could explore beyond the 9th Ward.
Go here for today's political hell raising activities.
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By LEIGH COLEMAN
SUN HERALD
July 12, ,2007
HANCOCK COUNTY --Education officials are sweating out a pending decision from FEMA that could throw a dark cloud over plans for two new elementary schools.
"This has really put a challenge out there for us," School Superintendent David Kopf said Monday of plans to build new schools in the south and north county.
The schools are planned for the Lakeshore and Leetown communities to replace the old Gulfview and Charles B. Murphy schools in the south county and add a new school in the north. Murphy and Gulfview were closed after Hurricane Katrina and would be replaced with South Hancock Elementary in Lakeshore. The new Leetown school, which would be called West Hancock Elementary, is planned because of rapid growth in the north county since the hurricane.
Both projects have been thrown in doubt by a recent FEMA memo that said the federal agency may not help fund any new public projects located in coastal high hazard areas. The old Gulfview Elementary site, where the new South County Elementary would be built, is squarely in such a location.
A non-fund decision from FEMA would endanger both projects because they were contracted as a package deal, with the bulk of the funding coming from FEMA compensation for the loss of Gulfview and Charles B. Murphy. A contract to build the new schools already has been issued to Roy Anderson Corp. for nearly $33 million.
Kopf said the school system had been working with FEMA on the new schools project for months. Then came the bad-news memo.
"Then, 22 weeks after, we get this memo saying they would not fund," he said. "They dropped that bombshell in our lap."
The school system sought help from Gov. Haley Barbour, Sen. Trent Lott, Sen. Thad Cochran and U.S. Rep. Gene Taylor. All have since been lobbying on the county's behalf to have the schools built with FEMA money. "We couldn't have asked for any more help," Kopf said.
Since the hurricane, students who previously attended Gulfview Elementary in the Lakeshore area and Charles B. Murphy in Pearlington have been bused for miles every school day. They have attended class in trailers behind Hancock Middle School, north of Interstate 10.
Kopf said he was communicating this week with Mike Womack, director of MEMA. Barbour has held discussions on the school funding with FEMA leaders in Washington.
Hopefully, a resolution may come soon, Kopf said. Until then, the futures of both new schools are suspended in doubt: "We're delayed on both fronts at this point."
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The Associated Press
July 11, 2007
BAY ST. LOUIS, Miss. --A FEMA trailer park on U.S. 90 near Hancock Medical Center in Bay St. Louis will remain open for several more months.
The City Council this week agreed to allow the Bay Village Trailer Park to operate until Jan. 31, 2008. It was scheduled to close on Aug. 31.
The Federal Emergency Management Agency had asked the city to allow the park to stay open until Jan. 31, 2009.
Bay Village was one of two parks in a one-block stretch until recently. A smaller park, on U.S. 90 to the east of Bay Village, was closed last week. In that location, FEMA had provided only pads for the trailers and did not operate a full-blown park.
Business owners have complained the park is a haven for criminal activity, including drug deals, burglary, prostitution and begging.
"This has been a major inconvenience to us," said John Rosetti, owner of Rosetti's Liquor Barrel.
Rosetti opened his store in a new building after Hurricane Katrina. He said residents of the park regularly commit crimes in the area and loiter in his parking lot, begging money from customers.
Even though police try to stay abreast of developments and FEMA-hired guards monitor an entrance gate and patrol the park, there seems to be no way to stop the crimes, Rosetti said.
FEMA representatives told council members that the park also houses residents who are not criminals. The also noted that a severe housing shortage in Bay St. Louis and Waveland means there is no place for trailer residents to go if the park is closed now.
FEMA representative Greather Heathcock said Hurricane Katrina destroyed 247 affordable apartments in Bay St. Louis and 496 apartments in Waveland.
"All we're asking for is an extension to give these apartments time to come back on board," Heathcock said.
Following the Aug. 29, 2005, hurricane, Bay Village was opened for employees of the John C. Stennis Space Center who had lost their homes. However, these residents soon moved on because relief programs sponsored by the Navy and other federal agencies became available. The trailers were then occupied by storm victims from various areas.
Phil Strouse, FEMA's local government liaison for Hancock County, said the federal agency eventually plans to start charging rent to storm victims who remain the trailers.
"Then, they're going to be paying $100 to $150 a month to live in a tin can," he said.
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Gwendolyn Marie Allen lives in a FEMA trailer near Baton Rouge with her son, who has schizophrenia, and her severely retarded brother, right.
CONVENT, La. — This was not how Cindy Cole pictured her life at 26: living in a mobile home park called Sugar Hill, wedged amid the refineries and cane fields of tiny St. James Parish, 18 miles from the nearest supermarket. Sustaining three small children on nothing but food stamps, with no playground, no security guards and nowhere to go.
No, Ms. Cole was supposed to be paying $275 a month for a two-bedroom house in the Lower Ninth Ward — next door to her mother, across the street from her aunt, with a child care network that extended the length and breadth of her large New Orleans family. With her house destroyed and no job or savings, however, her chances of recreating that old reality are slim.
Read the New York Times story.
The end.
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As Dale well knows, the company’s financials prove otherwise.
The Insurance Industry Institute pegged the industry's profits at $108 billion for 2005 and 2006. These profits are after companies paid taxes and Katrina claims they didn't pay. These profits are after companies paid out normal expenses such as employee income and benefits. These profits are after companies paid out extraordinary expenses such as their CEOs obscene compensation packages.
These execs denied legitimate policyholder claims stemming from Hurricane Katrina's wind damage. Company memos directed its employees to deny wind claims where ever so much as a drop of water was involved in the damage. [See Wind? Water? More like a Bunch of Hot Air! Also view these insurance documents on the website of Congressman Gene Taylor (D-MS). ]
Collectively the insurance companies sent our government's federal flood insurance program a $23 billion bill, the percent of which is fraudulent is yet unknown. For deliberately hurting Katrina survivors, these CEOs have been handsomely paid. In fact, I'd say that their pay has them drowning in millions. This year, State Farm increased the salary of its CEO by 82%.
Photo on State Farm Website
Ed Liddy has been 
Forbes Magazine reported Liddy’s total compensation for 2006 to be $18 million, and his 5-year compensation total to be $70 million. In 2005, Liddy’s compensation total was $27 million.
When it comes to bloated salaries, these gentlemen are in good hands with their respective companies. All that money didn't buy them ethics, decency, or integrity though. Instead, they acted as really bad neighbors toward their Katrina area policyholders. As for George Dale, he is acting in accordance with his reputation as a bought and paid for political hack of the industry.
M. Dale, if you will kindly look in a mirror, you’ll find the undue burden staring you right in the eye.
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This is the fifth in a series of five to help the Democratic Party, particularly its presidential hopefuls, to get the framework right, to broaden its lens through which it views Katrina, what’s stopping recovery, what will speed up a vibrant recovery, and how Katrina affords us the opportunity to transform the basic quality of life for all Americans.
“What being an adult means is knowing what you have to do and doing it, even though you may not feel like doing it.”
This definition applies to everything including politics. As we clear away our political cynicism, we will find a renewal of our spirits, our creativity, and our intellectual capitol all of which we need to be successful in any endeavor including political hell raising as we are inclined to do here at A.M. in the Morning!Robert T. KiyosakiRich
Dad’s Cashflow Quadrant
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