Water, water everywhere
nor any drop to drink.
Water, water everywhere
now insurance won’t sink.
The word game started with water – lots and lots of water – lifted by Katrina’s powerful winds, waves became walls of water – collapsing with such force water went further inland than shown on any flood map. New Orleans, the Big Easy, became the only bowl it never wanted and, those playing the word game began calling Katrina, the windstorm, the Great New Orleans Flood.
Immediately after Hurricane Katrina came ashore, and before anyone could possibly assess the damage, the insurance industry began pushing the message that the damage was caused by flooding, rather than wind. “The fact that a government-run levee fails and creates a flood does not create a liability for private insurers,” said Robert Hartwig, chief economist with the Insurance Information Institute in New York. “I would say on dollar terms, at least among homes, the majority is related to floods.”
The distinction was important because wind damage is covered under homeowner policies – flooding is not. Industry representatives took the message one step further when they tried to spin the story as “The Great New Orleans Flood”.
The phrase first appeared in a press release issued by insurance industry Risk Management Solutions (RMS), just three days after Katrina made landfall. RMS claimed that the following would account for at least 50% of the anticipated total economic losses, and that, “The 2005 Great New Orleans Flood has developed into the most damaging flood in U.S. history.
Winning this round of the word game was a natural for RMS, the world’s leading provider of products, services, and expertise for the quantification and management of catastrophe risk. Little more than 60 Continue reading “The Scheme – first there were just word games (Chapter 2)”