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Seven Year Wait for Insurance for Oklahoma Tornado Victims; Prison Perks?

Aired April 17, 2006 - 10:30   ET


DARYN KAGAN, CNN ANCHOR: More tornadoes for you. The one we were looking at a few minutes ago, that was Illinois. This also, though, from over the weekend, from Beatrice, Nebraska. A funnel cloud dropped from the clouds in Beatrice, left a big mess behind. Officials there are asking for volunteers to help clean up. Twisters caused damage in other parts of Nebraska, as well. This was the scene over the weekend in Nebraska city.
So you've heard the story. Gulf coast homeowners still fighting insurance companies seven months after Hurricane Katrina. Well, think about this. How about waiting seven years for your insurance company to pay up? That is the plight of some Oklahoma homeowners who survived the strongest tornado ever.

Gerri Willis has the story, which first aired on "PAULA ZAHN NOW."


UNIDENTIFIED MALE: I'm getting nervous. This is bad.

UNIDENTIFIED FEMALE: Look at that. Look at that.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR (voice-over): May 3, 1999, the strongest tornado ever recorded ripped through the southern suburbs of Oklahoma City. Up to a mile wide, with winds up to 318 miles per hour, it was part of a storm that killed 48 people and left widespread devastation. The tornado roared right by Donna and David Cosper's house.

DONNA COSPER, HOMEOWNER: The F5 tornado came right across the hillside there, where you see the treetops -- came right across there, and then there were two small tornadoes that came off of it, that came, went down through the trees and then hit the back of our home.

WILLIS: Cosper ran for a neighbor's storm cellar. About a mile away, off duty police officer Larry Love was working on his yard.

LARRY LOVE, HOMEOWNER: And a car came around this corner and he stopped and he said, hey, there's a big tornado coming, heading this direction.

WILLIS: Love rushed to take shelter at his mother-in-laws and with his family listened to the police radio.

LOVE: There is an Oklahoma City police officer that said that she was at Southwest 133rd Place and Briar Hollow Drive and that there are homes down, devastated and people trapped. She was just basically right around the corner.

WILLIS: Officer Love spent the next few days searching through rubble and rescuing people. When he finally went into his own home, he saw it was badly damaged.

LOVE: The roof shingles.

WILLIS: Donna Cosper was shocked when she came out of the storm cellar. Houses were reduced to rubble. Somehow her own house was still standing, but was also damaged, cracks in the walls, the house frame twisted so doors wouldn't close and the air conditioning malfunctioned, soon causing condensation and mold inside. Grass even grew out of one wall.

Cosper and Love got in touch with their insurance company, State Farm, to start the repair process.

(on-camera): The Cospers, the Loves and others in this community had been faithfully paying their premiums to State Farm for years. They figured that if the worst happened they'd be protected.

(voice over): But when the worst did happen, they say State Farm became part of the problem, not paying for all the damage.

JEFF MARR, ATTORNEY: We're suing State Farm for the way that they handled the catastrophe claims here in Oklahoma in 1999.

WILLIS: Jeff Marr represents Cosper, Love and more than 70 others in a class action suit against State Farm. He says State Farm hired a firm called Haag Engineering to inspect the homes, but he claims the engineering firm deliberately underreported the damage, allegations State Farm and Haag Engineering deny.

LOVE: They're saying that it was just poor construction.

WILLIS: Larry Love says State Farm first used a different engineering company to inspect his home. That company reported this about the roof, "The ridge beam appeared to be rotated, suggesting that the roof has undergone rotation or racking from the high winds. It appears this rotation caused the rafters to pull out of the beam."

Worried the inspection hadn't found all of the damage, Love asked for a second opinion. State Farm sent out Haag Engineering. Attorney Marr says the Haag report played down the tornado's effect on the house. "It appeared that the primary damage this dwelling received from the storm was from debris impact and interior exposure to weather and rain."

And there was this about the damage to the roof, "The separations were as-built conditions." Haag claimed the problem was there before the storm.

LOVE: I have two engineering reports. They basically took the first one that said that my house was damaged and stuff. They just disposed of that, and they basically told me no, the Haag report is gospel. This is exactly what it is. This is all we're paying, and you're not getting anything else.

WILLIS: State Farm paid Donna Cosper almost $62,000, but that was $30,000 short of what she ended up paying to fix structural damage, damage Haag Engineering said didn't happen in the tornado. Her safety engineer had a different story.

COSPER: He described it to me like the house just took a big breath because the pressure on the front of the house and the pressure on the back of the house, it just made the house suck apart.

MARR: State Farm used Haag to pay less on claims than what it should have, knowing that Haag had a biased in State Farm's favor and against the policyholder.

WILLIS: Marr points to a 1994 Texas State Supreme Court case that found State Farm hired Haag Engineering, knowing the firm would have a bias in the insurer's favor. In depositions for the Oklahoma case, Haag Engineering denied being biased against home owners.

And in a statement to CNN said the firm does not allow clients to influence the results of its reports. State Farm declined an interview, but in statements to CNN State Farm said it expects objective opinions from outside experts like Haag Engineering. And State Farm said it paid out $4.5 million on 77 claims after the tornado based on Haag Engineering reports.

State Farm did not say how many Haag Engineering evaluated claims were denied or reduced. In this deposition, State Farm's former Vice President proclaims Frank Haines said the company paid what is fair.

UNIDENTIFIED MALE: What should your policyholders have expected from State Farm following this catastrophe in regard to their claim handling?

FRANK HAINES, FMR. STATE FARM CLAIMS V.P.: They had a policy with State Farm, whether it be State Farm casualty or State Farm mutual housing, that their claim would have been handled as quickly as possible, as fairly as possible.

WILLIS: An Oklahoma court is getting ready to determine whether that really happened after the strongest tornado in recorded history.

COSPER: When I hear that like a good neighbor State Farm is there, it makes me nauseous. To this day it, makes me nauseous.

LOVE: Let me show you back here.

WILLIS: Larry Love still hasn't had his roof fully repaired. Donna Cosper spent $30,000 out of her own pocket to make her house livable. They hope that a judgment in their lawsuit will soon bring their seven-year nightmare to an end.

UNIDENTIFIED MALE: That's moving right at us. We got to get out of here. WILLIS: Gerri Willis, CNN, Oklahoma City.


KAGAN: Be sure to join Paula weeknights 8:00 Eastern, 5:00 Pacific on CNN.

The so-called shoe bomber, Richard Reid. It turns not he will not testify at the Zacarias Moussaoui sentencing trial after all. Reid is serving a life sentence for trying to blow up American Airlines flight in December 2001. The judge says the jury will get a written summary of information from Reid. Moussaoui claims the two planned to fly a plane into the White House on September 11th. He faces the death sentence. Jury deliberations are expected to begin on Friday.

Easter celebrations were on tap for American troops in Iraq over the weekend, but even on a holiday, survival is still top priority. We'll find out more about that story, coming up.

And breaking the code. Some religious leaders go on the offensive as their faith faces the latest challenge from pop culture.


KAGAN: Well, how would you like to confront this co-worker? And you thought the people you worked with were angry! This is what some folks at a car dealership in Florida found. We'll have the rest of the story coming up.


KAGAN: It's not a great way to start out your Monday, but how much time did you waste sitting there stuck in traffic, today and day after day. There has to be a better way. Well, welcome to the future and a possible cure for the traffic jam.


UNIDENTIFIED FEMALE: We're going to the moon -- there has to be other ways to get to our jobs.

I get up between 4:45 and 5:00 every day. I have to be at work at 7:15, and I often find myself dashing across the parking lot to make it.

It affects my life. It affects the way I feel, that feeling o, am I going to make it on time?

Time is such a valuable thing. It's up to three hours of the day that I sit in my car, and that's a huge amount of my life wasted. I'd be willing to try anything if that would make my commute less painful.

MILES O'BRIEN, CNN CORRESPONDENT (on camera): It is really painful when you add up all of the time we spend in our cars grinding our teeth as we grind our way through traffic. But what if we could commute through the wild blue yonder, breezing past the gridlock below.

UNIDENTIFIED MALE: One day not too far into the future, people are going to get off the ground, and they're going to be able to get airborne.

O'BRIEN (voice-over): Woody Norris is a man with big ideas. The inventor's latest project: the air scooter.

Don't let its looks fool you. This flying machine is ingenious for its simplicity. It is an odd hybrid design, with blades like a helicopter, a handle bar like a motorcycle and a specially designed lightweight four-stroke engine.

UNIDENTIFIED MALE: Turn the throttle and you go up. Release the throttle and you come down.

O'BRIEN: Due to hit the market later this year with the price tag of about $50,000, Norris says the air scooter could make rush hours a thing of the past.

UNIDENTIFIED MALE: With the air scooter, it's a direct line where the bird flies, and there's a lot more space up there than there is down on the ground. So we think that's going to solve the congestion problem.


KAGAN: Well that looks fun. In fact, Norris says anyone can learn to fly the air scooter, because of its simple handlebar controls. Even someone in a wheelchair can take flight because there are no foot pedals.


KAGAN: Coming up, there's a big buzz around little cars.


UNIDENTIFIED MALE: I would love it, yes.

UNIDENTIFIED MALE: Yes, great for going back and forth to work, easy to park. It's looks great.

UNIDENTIFIED MALE: That's a funny car.


KAGAN: How safe are these mini rides? We'll break it down.

And making room for real girls on the runway. Wait until you meet the winner of "Seventeen" magazine's modeling contest. She joins us in our next hour, shares her secret of success, and tells those anorexic girls, sorry, you're not a winner like she is.

(COMMERCIAL BREAK) KAGAN: Well, you can forget about pennies from heaven. A stampede you're about to see was triggered by folding money raining from a helicopter. The children -- two children, actually -- were injured in a mad scramble for $1,000 in Comstock Park, Michigan. A 7- year-old boy was trampled and later released from the hospital. A 7- year-old girl was pushed to the ground and suffered a bloody lip. The promotion was held at a Minor League Baseball game. A spokeswoman for the West Michigan White Caps said, well, this is why have everybody sign a waiver.

Prison guards having shotguns and tasers. The inmates may have crude knives of their own making, but the most powerful weapon may be a private TV set, a computer game or other perks.

CNN's Sumi Das tells us why in a report that first aired on CNN's "AMERICAN MORNING."


SUMI DAS, CNN CORRESPONDENT (voice-over): The hot sellers at the Two Rivers Correctional General Store in Umatilla, Oregon, are coffee, Ramen Soup and video game consoles. Inmates buy goods with money earned from prison jobs. But a few items, like the game consoles, seven inch TVs and CD players have a added cost, good behavior. Permission to buy the TV requires six straight months of clean conduct. A video game console, 18 months.

Randy Geer of the Oregon Department of Corrections says this non- cash incentives program shows inmate that hard work pays off.

RANDY GEER, OREGON DEPT. OF CORRECTIONS: In an institution where every day is somehow a shadow of the day that proceed it, that becomes, over time, almost a disincentive or an incentive to misbehave. So this gives them an alternative and a chance to have tomorrow be somewhat different.

DAS: Jason Touch is serving 21 years for robbery. Once prone to misconduct, he stayed trouble free for the past four years.

JASON TOUCH, INMATE: Actually, I've grown up a lot since I've been in here. Even working up to get a TV for people who have to work up to get a CD player and buy CDs. I mean, that's a responsibility.

DAS (on camera): The Oregon Department of Corrections says non- cash incentives work. Since the program began three years ago, the state inmate population has increased by about 11 percent, but the number of misconduct reports has remained stable.

(voice-over): Some critics say video games and flat screen TVs are luxuries prisoners shouldn't be afforded. John Foote has both prosecuted criminals and worked for the prison system. He says he sees both sides.

JOHN FOOTE, CLACKAMAS COUNTY DISTRICT ATTORNEY: I think the public really wants to know that people in prison are not being what is called coddled. But, on the other hand, I don't think anybody in a civilized society wants to see people treated inhumanely. So you had sort of competing, I think, reactions to it.

DAS: But Randy Geer points out giving prisoners incentives to meet goals on the inside will hopefully make them better citizens on the outside.

GEER: The long-term view is if you want to make society safer, if you want to make it less likely that inmates will re-offend, then you try and structure their time while they're inside in a way that produces better people.

DAS: Sumi Das, CNN, Umatilla, Oregon.


KAGAN: And you can see more stories like this on "AMERICAN MORNING." Miles and Soledad, each O'Briens, join you every day from 6:00 a.m. to 10:00 a.m. Eastern.

The D.A. is pointing fingers in North Carolina. Charges could be filed in the Duke University rape investigation case. A live report ahead on that.

Plus, it is the most heinous crime an Oklahoma town has ever seen. That's how prosecutors describe the killing of a 10-year-old girl. The suspect appears in court today. A live update with our Ed Lavandera is ahead, as well.



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