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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Thursday, August 02, 2007

What's the point?

Forgive me if I don't understand -- but what's the point of having insurance if you can't collect?

The victimization of Katrina survivors continues with a federal appeals court ruling that insurance policies that were supposed to cover the losses of businesses and personal property did not cover losses from Katrina.

Yes, I know flood insurance is a very special thing -- something dreamed up because the insurance companies that take our money to "protect" our property are scared silly over losing their shirts by having to pay claims.

And there could very well be culpability -- or gullibility -- on the part of the insured who thought they were covered.

But the three-judge panel sided with insurers fearful of a "multi-billion dollar hit."

"This event was excluded from coverage under the plaintiffs' insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written," Judge Carolyn King wrote for a three-judge panel of the 5th U.S. Circuit Court of Appeals. As a result, the panel found those who filed the suit "are not entitled to recover under their policies," she said.

I'm sure all those folks who paid multiple billion dollars in premiums are comforted.

The heart of this issue, obviously is whether the floods that followed the wind and the storm surge were an act of God -- or an act of the federal government and Army Corps of Engineers that failed to build adequate levees to hold back the water.

What is most appalling is the belief of the three-judge panel that:
...even if the plaintiffs can prove that the levees were negligently designed, constructed, or maintained and that the breaches were due to this negligence, the flood exclusions in the plaintiffs' policies unambiguously preclude their recovery. Regardless of what caused the failure of the flood-control structures that were put in place to prevent such a catastrophe, their failure resulted in a widespread flood that damaged the plaintiffs' property," and policies clearly excluded water damage caused by floods.
Want to bet insurance agents explained that to folks who plunked down their hard-earned cash?

Is it any surprise that two of the justices are Bush appointees -- 41 and 43 -- and one was named to the bench by Jimmy Carter?

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Anonymous Anonymous said...

The appeals court was right.
I can barely believe this even got to an appeals court.

Why be an idiot and insist that white is black, when, in this case, the insurance companies insist that white is white?
Just because George Bush says the sun rose in the east this morning does NOT make it false (although you should check outside first.)

Everyone knows that flood is not covered by standard insurance policies, no matter how unfair that is,
since the majority of losses are due to floods.

The insurance companies did all they could to cast ALL damage as flood damage, because they know that is not covered. And for that, they are completely in the wrong, and have been sued accordingly.

Many people suffered because their houses were flooded. It was not the fault, or the responsibility, of the insurance companies, EVEN THOUGH they have a lot of money.

August 03, 2007 12:11 PM  
Blogger Outraged Liberal said...

The question to me is Act of God versus act of man. I agree that act of God flooding isn't covered and won't even attempt to address if that is wise or not.

But act of man -- as in inadequate levee protection -- is a subject worthy of adjudication. We know insurers' tendencies run to denying every claim. This one needs to be vetted by the courts -- all the way if necessary. (even those this current Supreme Court is likely to side with the appeals panel).

August 04, 2007 7:22 AM  

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