
Congressman Gene Taylor
U.S. House of Representatives
Fourth District of Mississippi
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2269 Rayburn HOB
Washington, DC 20515
(202) 225-5772
Fax (202) 225-7074
For Immediate Release
Contact: Ana Maria Rosato
(202) 253-1308
June 10, 2009
Rep. Gene Taylor (D-Miss.): Insurance Company USAA
publicly admits shifting costs to NFIP, taxpayers
Pass my Multiple Peril Insurance Act to protect
coastal homeowners and America’s taxpayers
In oral arguments before the Mississippi Supreme Court on Tuesday, insurance company USAA admitted that it shifted its own costs to the federal government’s National Flood Insurance Program (NFIP). In the first wind vs. water case to reach Mississippi’s state’s high court, the lower court asked the high court to interpret the “anti-concurrent causation” clause that is often buried inside homeowner contracts. The lower state court requested the high court interpret the burden of proof before the case is heard on the facts.
At issue is whether the insurance company bears the burden of proof to determine the extent of property damage caused by wind or whether the company can void a homeowner’s wind coverage simply because water came on the property at some point. USAA asked the court not to require the company to pay any wind damage based on the fact that the property also incurred some water damage. The Gulf Coast suffered up to four hours of damage from hurricane force winds before any flooding began.
“Asking the court to sanctify the company’s decision not to live up to its fiduciary responsibility to the federal taxpayers and homeowners is outrageous,” responded Rep. Gene Taylor (D-Miss.). “I vigorously renew my call for the U.S. Senate to follow the lead of the U.S. House of Representatives and pass my Multiple Peril Insurance Act. This act eliminates all opportunities for insurance companies to continue to betray Coastal American homeowners and taxpayers.”
NFIP is financed through homeowner policyholder premiums, which are subsidized with federal tax dollars. In the aftermath of Hurricane Katrina, the NFIP ran a $17.5 billion deficit while the Property & Casualty Industry boasted $108 billion in profits in 2005 and 2006. To date, Congress has yet to determine the extent to which the NFIP’s billion dollar deficit may have come from fraudulent claims that the insurance companies deliberately submitted.
“What we learned from Katrina is that insurance companies have an inherent conflict of interest when it comes to adjusting flood claims on properties that also sustained wind damage. Over and over and over again what we learned after Katrina,” Taylor continued “is that companies like State Farm and Nationwide put out memos directing staff to resolve this conflict of interest in the company’s favor and to the detriment America’s homeowners and taxpayers. USAA’s court admission confirms this as well.” Continue reading “Gene Taylor Comments on Corban and Claims Dumping”