Commissioner Should Fight Industry Effort to Deny Katrina Claims
Louisiana Insurance Commissioner Robert Wooley is wrong to defend insurance company efforts to deny Katrina survivors their full claim, consumer advocates with the nonprofit (FTCR) said today. In an interview aired this morning, Wooley told National Public Radio that if companies are forced to cover their policyholders for all the damage caused by Katrina: “You’re going to bankrupt the insurance companies.”
Commissioner Wooley went on to say people with water damage should seek federal loans, because if insurers compensate policyholders for damage from hurricane-related flooding or storm surge, “the people who have legitimate wind claims behind those folks that didn’t get there quicker, they’re going to have no money.”
Insurers, which posted record profits and surpluses last year, would not run out of money to pay claims, according to FTCR. Still, Wooley would protect the nation’s largest insurance companies — including the top three home insurers State Farm, Allstate and Farmers, which cover 60% of policyholders in Louisiana and 46% in Mississippi — from having to pay legitimate claims that should be covered under homeowners’ policies. The group said that residents in Louisiana, Mississippi and Alabama who purchased insurance with hurricane or wind coverage should be covered, whether it was wind or water that did the damage, because the predominating cause of all the damage was the hurricane.
“Government officials should not be calling on taxpayers to cover claims that insurance companies should pay,” said FTCR’s Executive Director Douglas Heller. “Hurricane Katrina will not bankrupt State Farm, Allstate or Farmers and Commissioner Wooley should be fighting to get survivors their full claim paid, not sending them off to FEMA in order to save insurers some money.”
Heller added: “The insurance industry reaped a $40 billion profit last year, took in about $400 billion in premiums and holds an additional $400 billion in surplus. Government officials should be worrying more about the tricks insurers will use to low-ball Katrina survivors, because the insurance industry is in fine shape to cover the losses.”
FTCR has set up a website for Katrina survivors to explain their frustrations with and complaints about the insurance claims process as well as a series of tips for dealing with insurers during the claims process: