The Check's in the Mail; Thousands of People Who Lost Their Homes to Katrina Are Battling to Get Paid by Insurers. the Issue: Wind vs. Water

By Contreras, Joseph | Newsweek, May 29, 2006 | Go to article overview

The Check's in the Mail; Thousands of People Who Lost Their Homes to Katrina Are Battling to Get Paid by Insurers. the Issue: Wind vs. Water


Contreras, Joseph, Newsweek


Byline: Joseph Contreras

Nothing was left of John Hadden's $600,000 beachfront house when he returned to Bay St. Louis, Miss., three days after Hurricane Katrina hit. But Hadden didn't despair: the 45-year-old financial adviser had insured his home for nearly $700,000 with State Farm Insurance. "All is well. Thank God & State Farm," Hadden spray-painted on one of the concrete pilings that remained. But in January, Hadden received a letter from the insurer denying him any benefits whatsoever. Now the father of three teenagers is suing the insurer. And he's painted over the words "State Farm" on the piling.

Thousands of families who lost everything to Katrina's fury last August are now facing a second disaster: their insurers won't pay them a dime. The homeowners say they were led to believe they'd be covered when they signed up for their policies. The companies insist they're off the hook because of exclusionary clauses that distinguish between damage caused by wind (covered) and water (not covered). The courts will decide who's right: hundreds of homeowners have sued their insurers, among them U.S. Sen. Trent Lott, who lost a house in Pascagoula, Miss., and Congressman Gene Taylor, whose home in Bay St. Louis was destroyed.

While it's hardly unusual for homeowners and insurers to find themselves at loggerheads after a disaster, the wind vs. water debate has been especially rancorous. Earlier this month, 669 plaintiffs sued State Farm for allegedly denying their claims without properly investigating the cause of the damage to their homes. And last year, Mississippi Attorney General Jim Hood launched a suit against five big insurers--State Farm, Allstate, Nationwide, United Services Automobile Association and Mississippi Farm Bureau Insurance--for allegedly tricking Katrina victims into signing forms stating that their homes sustained flood damage, which isn't covered. "The robber barons of our time," Hood calls the insurers.

The companies say they've acted fairly, and that the lawsuits are unfounded, but they declined to comment on individual hurricane victims or specific suits. "The magnitude of the storm and the number of claims processed were unprecedented," says State Farm spokesman Phil Supple. "We know that unfortunately there will be disputes, and we in no way want to deprecate the concerns of people in these disputes."

If the Katrina homeowners prevail, it could mean big financial exposure for the insurance industry. Policyholders filed a total of $38.1 billion in claims after the hurricane, but insurers have doled out only $22 billion to policyholders in Louisiana and Mississippi, where the overwhelming amount of damage occurred. The discrepancy to some extent reflects the exclusionary clauses that allowed insurers to deny claims for damage that adjusters determined was caused, in part, by water. Commonly referred to as "anti-concurrent causation clauses," they exempt carriers from any responsibility for hurricane wind damage if the company believes other factors like storm surge were also responsible. Insurers say the clauses have been a standard feature of policies for many years, and are well-established under case law.

But homeowners think the clauses are so confusing as to be misleading, with dense jargon only a lawyer could love. State Farm's policy reads: "We do not insure any coverage for the loss which would not have occurred in the absence of one or more of the following excluded events. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Check's in the Mail; Thousands of People Who Lost Their Homes to Katrina Are Battling to Get Paid by Insurers. the Issue: Wind vs. Water
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.