The Aftermath of Katrina and the Insurance Wars – Hard Feelings Worn on a Sleeve

The insightful commentary on my Happy New Years post is the reason we are linking to Dr McFarland’s presentation at Gene Taylor’s Town hall meeting held last August in Bay St Louis. The anger from being reduced to living in a camper trailer while State Farm was opinion shopping their engineers has naturally lead to some very strong feelings among those made homeless by Katrina. It sometimes spills over into the commentary at places like the Yahoo Allstate Stock Board and the video clip below. I am more than content to let our readership gauge the depths of the anger down here both in the linked post by Coastal Cowboy and the following Youtube clip. Originally we were not going to link Dr McFarland and I am not doing so to bash the insurance industry people reading this blog. Rather it I hope it illustrates the very real frustration that has accompanied Katrina and it’s aftermath and perhaps even lead to a greater understanding of all of the perspectives among the antagonists on this issue.

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[youtube=http://www.youtube.com/watch?v=Bl4Nt8qPF0E]

Tish Williams on the Impact of the Insurance Crisis on Small Business

“Small business were simply left out”, said Tish Williams, executive director of the Hancock County Chamber of Commerce to the assembled congressional delegation gathered in Bay St Louis. She told story after story of long time small business owners fighting to stay open, some living off their savings so their employees could be paid. She also recounts the horror stories of businesses unable to fully insure their risks due to the high costs.

[youtube=http://www.youtube.com/watch?v=nd-fNRmElrE]

Wind Pool Board Member David Treutel on Multiperil Insurance

“We are all affected by catastrophies, even if we are not in affected areas”, explained Mississippi Windstorm Association vice chair David Treutel as the costs of reinsurance impacts all who buy insurance. Dave goes on to explain the many ways events here on the Mississippi coast have changed the insurance equation in far away places like Rhode Island and how this issue literally impacts everyone in the country.

[youtube=http://www.youtube.com/watch?v=ZIie1Q2kNvc]

Happy New Year from the Mississippi Gulf Coast

When I agreed to take on this project the possibility it may fail crossed my mind, after all, the sum total of our collective experience on blogger could fit in a thimble. Motivated by those who are actively working against the people on the coast getting a fair shake from their insurer we began undaunted by the long odds that we could actually interest a potential readership in this very complex issue.

While the spillover from the “insurance wars” captivates the nation we continue to stick to our knitting of educating the public on the very real problems exposed by Katrina’s wind and water over two years ago. Though we have not been burning up the proverbial commentary meter, Coastal Cowboy summed up our goal best early on, “The measure of our success will not be the amount of comments we get or the number of readers we attract, rather it is having the RIGHT folks reading us.”

By that measure our first month online is a resounding success as we’ve attracted readers from 3 foreign countries as well as from across the US. We count people from diverse places like Washington DC, Lincoln Nebraska, and Bloomington Illinois to small towns like New Albany, Mississippi among our readership. We hope to continue educating all on our perspective, that of ordinary men and women here on the coast who struggle with the costs of insurance everyday and the related local fallout from insurance companies refusing to honor their contracts on the coast post Katrina.

So we thank our readers, even those who may disagree with our viewpoint, for spending time with us this past month as we too hope the New Year brings resolution to more of the good folks of the Mississippi Gulf Coast. God Bless us all in 2008.

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“Lawyer

We end the third year since Katrina with more lawyers shoveling smoke in Mississippi than in any other state – certainly on a per capita basis, if not by actual count. The question yet to be answered is “Where’s the fire?”

Katrina left over 60,000 Mississippi families homeless. One of those happened to be the family of a man the Wall Street Journal has called the King of Torts. To those on the Coast slabbed first by Katrina and then by their insurance provider, he was known as Dickie, King of Hope

Now, he has lawyers; his son has lawyers, his associate has lawyers and there is no longer a group of lawyers known as the Scruggs Katrina Group – and all are shoving smoke blown their way by a lawyer named Balducci – reportedly working for either Scruggs or SKG – who made what can only be called a significant error in judgment by either attempting to bribe a judge or confessing to such. There’s still too much smoke to tell exactly which it was; but, under all that smoke is a case filed against Scruggs by a group of lawyers that were associated with the Katrina Group. Now they have lawyers, too.

We’ve got such a booming lawyer business going here that our Insurance Commission picked up the tab for lawyers to represent State Farm when SKG deposed a member of the Department’s staff on matters related to claims filed by State Farm policy holders. The Commissioner had to get approval to pay State Farm’s lawyers from the Attorney General who has lawyers of his own because State Farm is suing him – remember Mississippi is the Hospitality State. Come to find out, that what we got for our money was a State Farm lawyer telling the man, “Don’t answer that”.

In light of that shovel full of smoke, it’s hard to believe that State Farm has now filed a suit to make Scruggs “answer that” – at least, they’re paying their own lawyers this time. If you’re confused, don’t be ashamed. The judge got so confused he couldn’t tell whose interest Scruggs was representing. It seems like he could have asked; but, at Ground Zero, points of law and common sense can be two entirely different matters.

We don’t shovel smoke here at the Mississippi Insurance Forum. Our purpose is to blow all the smoke away and see if there’s any fire under the hot tin roof that’s smoldering down here – and that would be Tennessee Williams and not John Gresham, by the way. Stay tuned for more and Happy New Year.

George Schloegel of Hancock Bank on the Insurance Crisis in Mississippi

“The status quo of doing nothing is absolutely not acceptable”, said George Schloegel, Chairman and CEO of Hancock Bank, to the assembled members of Congress on our insurance crisis. Banks will not lend on projects that aren’t insured and the lack of insurance options on the coast has killed many otherwise economically viable projects.

[youtube=http://www.youtube.com/watch?v=-fa_XJAVtnA]

Dave Dennis on Insurance

“For the average person it is fundamentally not working…” said Dave Dennis, owner of Specialty Contractors and current board member on the New Orleans Federal Reserve on the insurance market in Mississippi, specifically the Gulf Coast. This issue is not about liberal or conservative, republican or democrat as all of us here on the coast are suffering the proverbial boot to our throats applied by big insurance and their Mississippi based scallywag enablers.

[youtube=http://www.youtube.com/watch?v=2CKZ-M5T66k]

Update: Today the Sun Herald ran this story on Dave Dennis and his retirement from the New Orleans Fed:

“For many people, the Federal Reserve might be a mysterious board that deals mainly with interest rates. Following Hurricane Katrina, the Fed helped South Mississippians and New Orleanians in a very concrete way. And a Coast businessman can be credited with helping make that possible.

Dave Dennis, president and CEO of Specialty Contractors & Associates Inc., in Gulfport, has served on the New Orleans branch of the Federal Reserve Board of Directors since 2001 and was appointed by the governors. He is retiring from the board when his term expires this month.

“He has been an outstanding director,” said Bob Musso, senior vice president and branch manager of the Federal Reserve Bank of Atlanta, New Orleans branch. “And he’s been an outstanding ambassador for the Federal Reserve.”

Another Great Editorial in Today’s Clarion Ledger

Here is another very well reasoned editorial from our friends at the Clarion Ledger in Jackson:

Insurance: Katrina demonstrates need for bill

Fourth District U.S. Rep. Gene Taylor says he will fight again in 2008 for a bill to add wind coverage to federal flood insurance for protection from another hurricane like Katrina.

But, if so, he’s going to have to find an ally in the Senate.

The House bill, which Taylor co-sponsored, with the support of House Speaker Nancy Pelosi, D-Calif., added wind coverage to the National Flood Insurance Program. But the wind coverage provision was not included in a bill the Senate Banking Committee approved, The Associated Press reported. Sen. David Vitter, R-La., has blocked a vote by the full Senate because optional wind coverage and higher coverage limits were not included.

The Senate bill was sponsored by Banking Committee Chairman Chris Dodd, D-Conn., and Richard Shelby, R-Ala. Taylor said he can understand Dodd’s objections because of the insurance interests headquartered in his state. “Shelby is the one I keep scratching my head over,” he said, because of his constituents in coastal Alabama.

Republican Mississippi Sen. Thad Cochran supports the multiple-perils bill. He should lobby his colleagues for it. Democratic Sen. Hillary Rodham Clinton had introduced a similar bill in the Senate.

Taylor’s bill had already been massaged by the House to meet potential objections. Pelosi led a 13-member congressional fact-finding mission to the Coast in August. Listening to victims at a town hall meeting in Bay St. Louis, she pledged to help, but even she acknowledged: “We’re up against a mighty force (lobbying efforts of the insurance industry).”

Pelosi helped push Taylor’s “multi-peril” Flood Insurance Reform and Modernization Act of 2007 through the Financial Services Committee in July, and it went to the Senate with full House backing as HR3121. It would allow flood insurance policyholders to purchase wind insurance or as a stand-alone policy, and increases limits.

Catastrophic insurance for hurricanes remains a need for U.S. coastal areas nationwide, so it could – and should – be resurrected. Mississippi is not alone in facing higher insurance premiums, if it’s available.

As has been noted in www.clarionledger.com/forums under “Katrina-related issues,” home insurance rates are skyrocketing in all the nation’s coastal areas. The experience with Katrina on the Coast, still waiting for insurance and government promised relief, is evidence for HR3121.

As one reader wrote: “My husband and I chose to stay here, even though we lost everything we owned, because of his business. It cost everything we had and then some to build a new home, miles away from the water and insurance was still astronomical. But … if we waited for progress to be made down here, we would be dead.”

HR3121 should not be allowed to die. The very life of the Coast could be at stake.

HR3121 News Out Today

Folks, when Gene Taylor isn’t fighting us here on the Coast he is looking after our Mississippi boys serving in Iraq, this time bringing them 50 gallons of Tony Trapani’s best seafood gumbo for a special Christmas Eve dinner in Iraq. Now Gene is not some tin horn chicken hawk content to send other people sons and daughters to fight George Bush’s war as his own flesh and blood is on the wall for us in Middle East. God bless Gene Taylor and his service to all of us here in the Mississippi 4th congressional district.

There are two stories out today about the status of HR3121. Some local background is in order as it was clear to me back in August at Gene’s town hall meeting that the assembled democratic leadership (which included Jim Clyburn and Nancy Pelosi) saw our nation’s coastal insurance problems as a potent campaign issue. Gene may have taken the first shot today at a now locally famous GOP corporate water boy, Senator Richard Shelby of Alabama.

“The Senate bill was sponsored by banking committee Chairman Chris Dodd, D-Conn., and Richard Shelby, R-Ala. Taylor said he can understand Dodd’s objections because of the insurance interests headquartered in his state. “Shelby is the one I keep scratching my head over,” said Taylor, who thought the senator would support the measure because of his constituents in coastal Alabama.”

Now it appears the AP story picked up by the Clarion Ledger derives from Anita Lee’s story at the Sun Herald but contains a few paragraphs (the last two in this excerpt) not found in the Sun Herald piece:

“Taylor, D-Miss., who represents south Mississippi in Congress, said Wednesday that people won’t build back on the Gulf Coast until they are able to buy insurance they can depend on.

Critics of multiple-peril insurance say such a program would be financially unsound, leading to more debt on top of the $20 billion NFIP incurred from Hurricane Katrina.

Taylor said it would be better to spread hurricane risk among coastal states rather than have individual states assume those risks. Mississippi, for example, offers wind insurance for six coastal counties. Florida and other states also have wind pools.”

To date this Cowboy is not aware of one shred of evidence these “critics” have presented to support their assertion that HR 3121 would be financially unsound. Also the critics the story quotes leave out the unpleasant fact that it has been alleged that as much as $9 BILLION dollars of wind claims may have been dumped on the taxpayers via the flood program.

Down here folks when someone intentionally spreads a half truth it’s called, “pissing on your leg and saying it’s raining.” When it comes to the debate on HR3121 and it’s unnamed critics, it’s best to come to the hoe down equipped with an umbrella.

Mr. Rogers Couldn’t “Make Believe” this Neighborhood

Before Katrina, the mix of neighborhoods in the three coastal counties of Mississippi was typical small town America and the place called home to those living there.


Home after home looked like this in neighborhoods from Ground Zero to the Alabama state line after Katrina. Because the wind had earlier blown the roof off this house, when the water came, the lucky owner and his family were able to roof raft their way to safety in what he later called the ultimate water ride.

Over two years after Katrina, this home and countless others look like this – each in some way a casualty of the insurance war. Many, like this homeowner, are victims of the uncertainty. As Mr. Rogers sang, he “wants to have a neighbor just like you…to live in a neighborhood with you.”

Rebuilding is more than construction. Neighborhoods are the infrastructure of both the built and social community. Unless a home owner can self insure, he is limited to the current $250,000 limit of flood insurance since windstorm policy recovery has proven problematic. At the current cost of construction, that equates to a home of approximately 1800 square feet – larger than the largest Katrina Cottage but considerably smaller than many of the homes lost to the storm.

The longer the uncertainty lingers, the more difficult it becomes to rebuild the social community. Social networks provide relationships that connect people to essential social supports in much the same way that roads connect the built community. Many consider these social networks “the ‘scaffolding’ or framework upon which successful community-building efforts are created.”

The wind came first, then the water – washing away all but the truth. “Somewhere deep inside each one of us human beings is a longing to know that all will be well.”