Insurance Companies

John Cole on insurance companies and Katrina.

Apparently, the position of the insurance companies is that even though these folks thought they were buying hurricane insurance, the companies only will pay for wind damage (which is not surprising, because rarely do insurers in flood plains offer flood insurance*- you have to go through FEMA for that). The problem is, how do you prove your house was damaged by wind, and not the water? And what about the fact that the storm surge is caused by the wind?

Essentially, this is like having medical insurance that covers gunshot wounds, but doesn’t cover wounds by small pieces of metal that act as a projectile. It makes no sense, and, based on the information I have right now, it is an act of bad faith and is unconscionable.

And I am not impressed with claims this will ruin insurance companies. Years and years of record profits would suggest they have a way to rebound. Or they should find another way of making a living, something a touch more honorable. Like beating old women over the head on their way to church and stealing their purses.

That says it all, I don't have anything to add.