Katrina victims lose in appeals court

[Jenn! 918]

To your point to Jenn, Anything made by man can be destroyed by nature. At some point everything fails. A class 5 hurricane is something that should be expected in NE at some point. You say we should have the Dutch teach us about dikes? I bet their dikes wouldn't hold up to a monster like Katrina. Sh!t happens, you need to be prepared for it.

Sorry, Gary, I don't understand what you mean. I didn't say anything about the Dutch.

I was replying to Caladan, not you. She said "jenn, I don't expect the insurance companies to pay up but a lot of the Katrina nonsense just pisses me off generally since so many people's reaction seems to be blaming people for expecting infrastructure to hold."

That is what I was replying to.

Ok, gotcha. I need some coffee apparently.

[Trumplestiltskin 5,791]

From the earlier summary I read shortly after Katrina, jenn, they had 'wind and water' damage coverage as part of their hurricane coverage, and the company's been arguing that 'wind and water' didn't apply to the levee aftermath. I think that's unfortunately probably decided correctly, legally speaking, but it doesn't mean that they were irresponsible home owners.

No doubt is an unfortunate situation. I agree that they are not irresponsible homeowners, and they have done what any normal person would do, that is, go after their insurers. I also agree that the guidelines for determining what category a particular loss falls under are convoluted and difficult to understand for your average person. I work with the stuff all day, and it's confusing as heck to figure out whether this particular claim falls under wind vs. rain vs. thunderstorm etc. However, none of this negates the fact that it seems the law is on the side of the insurers this time. No one really expects an insurance company to say, "ok, well even though you weren't technically covered, we'll let this one slide.", right?

So in other words - a person might have a pretty comprehensive knowledge of the terms of their home insurance policy, but could still find themselves without coverage in certain situations that are deemed outside of the normal scope of a particular 'disaster' provision. In other words - I could think I have full coverage, when in reality I really don't - because the determination of whether a particular incident is covered or not is made subjectively and ultimately I have no way of telling whether or not I really do have full coverage.

Surely a false sense of security?

I guess you could say that.

With my knowledge of insurance, I have anything but a sense of security when it comes to my own coverage. There's really no such thing as full coverage.

But you have to realize that without all of the exclusions, premiums would be through the roof. Personally, I'm willing to take my chances paying something affordable and getting the best coverage I can for my money.

Well that's the trick - if there is a greater good in ensuring lowered premiums for all if those premiums are essentially worthless anyway. I'm not so sure...

That kind of puts the kibosh on all those 'personal responsibility' arguments, unless the person truthfully had no insurance of any kind. Because you can apparently and in good faith be sold insurance for flood damage and think you have coverage when you really don't - and have no way of knowing whether or not you are covered in a particular instance until you find out the hard way.

Edited August 3, 2007 by Number 6

[Jenn! 918]

From the earlier summary I read shortly after Katrina, jenn, they had 'wind and water' damage coverage as part of their hurricane coverage, and the company's been arguing that 'wind and water' didn't apply to the levee aftermath. I think that's unfortunately probably decided correctly, legally speaking, but it doesn't mean that they were irresponsible home owners.

No doubt is an unfortunate situation. I agree that they are not irresponsible homeowners, and they have done what any normal person would do, that is, go after their insurers. I also agree that the guidelines for determining what category a particular loss falls under are convoluted and difficult to understand for your average person. I work with the stuff all day, and it's confusing as heck to figure out whether this particular claim falls under wind vs. rain vs. thunderstorm etc. However, none of this negates the fact that it seems the law is on the side of the insurers this time. No one really expects an insurance company to say, "ok, well even though you weren't technically covered, we'll let this one slide.", right?

So in other words - a person might have a pretty comprehensive knowledge of the terms of their home insurance policy, but could still find themselves without coverage in certain situations that are deemed outside of the normal scope of a particular 'disaster' provision. In other words - I could think I have full coverage, when in reality I really don't - because the determination of whether a particular incident is covered or not is made subjectively and ultimately I have no way of telling whether or not I really do have full coverage.

Surely a false sense of security?

I guess you could say that.

With my knowledge of insurance, I have anything but a sense of security when it comes to my own coverage. There's really no such thing as full coverage.

But you have to realize that without all of the exclusions, premiums would be through the roof. Personally, I'm willing to take my chances paying something affordable and getting the best coverage I can for my money.

Well that's the trick - if there is a greater good in ensuring lowered premiums for all if those premiums are essentially worthless anyway. I'm not so sure...

That kind of puts the kibosh on all those 'personal responsibility' arguments, unless the person truthfully had no insurance of any kind. Because you can apparently and in good faith be sold insurance for flood damage and think you have coverage when you really don't - and have no way of knowing whether or not you are covered in a particular instance until you find out the hard way.

Well, it's not like all insurance claims are denied, so I wouldn't say that insurance is essentially worthless. And I also think it's an exaggeration to say that there's *no* way of knowing what will and will not be covered. While there are certain things that fall into gray areas, especially with home insurance, I believe most homeowners have a general idea of what they're covered for. I think it's pretty common knowledge that your standard home policy does not cover flood damage, for example.

Unfortunately some people believe the fallacy that purchasing insurance *eliminates* one's risk. The more you pay, the less your risk, but there's no way to eliminate it.

[Trumplestiltskin 5,791]

From the earlier summary I read shortly after Katrina, jenn, they had 'wind and water' damage coverage as part of their hurricane coverage, and the company's been arguing that 'wind and water' didn't apply to the levee aftermath. I think that's unfortunately probably decided correctly, legally speaking, but it doesn't mean that they were irresponsible home owners.

No doubt is an unfortunate situation. I agree that they are not irresponsible homeowners, and they have done what any normal person would do, that is, go after their insurers. I also agree that the guidelines for determining what category a particular loss falls under are convoluted and difficult to understand for your average person. I work with the stuff all day, and it's confusing as heck to figure out whether this particular claim falls under wind vs. rain vs. thunderstorm etc. However, none of this negates the fact that it seems the law is on the side of the insurers this time. No one really expects an insurance company to say, "ok, well even though you weren't technically covered, we'll let this one slide.", right?

So in other words - a person might have a pretty comprehensive knowledge of the terms of their home insurance policy, but could still find themselves without coverage in certain situations that are deemed outside of the normal scope of a particular 'disaster' provision. In other words - I could think I have full coverage, when in reality I really don't - because the determination of whether a particular incident is covered or not is made subjectively and ultimately I have no way of telling whether or not I really do have full coverage.

Surely a false sense of security?

I guess you could say that.

With my knowledge of insurance, I have anything but a sense of security when it comes to my own coverage. There's really no such thing as full coverage.

But you have to realize that without all of the exclusions, premiums would be through the roof. Personally, I'm willing to take my chances paying something affordable and getting the best coverage I can for my money.

Well that's the trick - if there is a greater good in ensuring lowered premiums for all if those premiums are essentially worthless anyway. I'm not so sure...

That kind of puts the kibosh on all those 'personal responsibility' arguments, unless the person truthfully had no insurance of any kind. Because you can apparently and in good faith be sold insurance for flood damage and think you have coverage when you really don't - and have no way of knowing whether or not you are covered in a particular instance until you find out the hard way.

Well, it's not like all insurance claims are denied, so I wouldn't say that insurance is essentially worthless. And I also think it's an exaggeration to say that there's *no* way of knowing what will and will not be covered. While there are certain things that fall into gray areas, especially with home insurance, I believe most homeowners have a general idea of what they're covered for. I think it's pretty common knowledge that your standard home policy does not cover flood damage, for example.

Unfortunately some people believe the fallacy that purchasing insurance *eliminates* one's risk. The more you pay, the less your risk, but there's no way to eliminate it.

But in this case you can pay to be covered for flood damage but still have your claim denied because a subjective determination is made that a certain incident which most people would assume is covered falls - outside of the range of coverage for that particular type of incident. I think most people would reasonably assume that flood damage coverage includes that caused by major storms, but clearly that's not the case. And again - a person has no way of knowing that until its already too late.

As far as it being worthless - if your claim won't pay out based on a subjective interpretation of a natural event that you would otherwise be covered for, and which takes advantage of a 'get out' clause to avoid paying - I'd certainly say its worthless... or at the least of very dubious value.

Edited August 3, 2007 by Number 6

[Jenn! 918]

But in this case you can pay to be covered for flood damage but still have your claim denied because a subjective determination is made that a certain incident which most people would assume is covered falls - outside of the range of coverage for that particular type of incident. I think most people would reasonably assume that flood damage coverage includes that caused by major storms, but clearly that's not the case. And again - a person has no way of knowing that until its already too late.

As far as it being worthless - if your claim won't pay out based on a subjective interpretation of a natural event that you would otherwise be covered for, and which takes advantage of a 'get out' clause to avoid paying - I'd certainly say its worthless... or at the least of very dubious value.

Have you never received any payment from an insurer before? How can your insurance be worthless if it pays out claims? You're saying that if your insurer doesn't pay out the particular claim that you would like it to pay then it is worthless? Well, I guess so if that's the standard of determining value. I wish my auto insurance would cover me when I punctured my tire, but it didn't - that doesn't mean it's worthless.

Furthermore, how can an insurer be "taking advantage" of a clause, if that clause is, in fact, written there in black and white?

I don't see what kind of solution you would propose, other than that you want everything to be covered, no worries about exclusions for certain events. That's just fine, but like I said, expect your premiums to skyrocket. I know you wish that the language was less ambiguous, and that's a fair point. But I don't think it's as simple as it sounds.

You get what you pay for!

Edited August 3, 2007 by jenn3539

[GaryC 7]

But in this case you can pay to be covered for flood damage but still have your claim denied because a subjective determination is made that a certain incident which most people would assume is covered falls - outside of the range of coverage for that particular type of incident. I think most people would reasonably assume that flood damage coverage includes that caused by major storms, but clearly that's not the case. And again - a person has no way of knowing that until its already too late.

As far as it being worthless - if your claim won't pay out based on a subjective interpretation of a natural event that you would otherwise be covered for, and which takes advantage of a 'get out' clause to avoid paying - I'd certainly say its worthless... or at the least of very dubious value.

You do have a way of knowing. You ask. If you are unsure if your being told the truth you have them show you in the policy. I don't get where your coming from fish. 99% of the circumstances will be covered with the average policy. Your house catches fire, they pay. A tree falls on it, they pay. The Katrina event was a once in a lifetime thing. If the homeowner wants to be covered for that then he asks questions, is given the price for that coverage and then decides if it's worth it. It's not up to the insurance company to cover you if you don't ask for it.

[Jenn! 918]

But in this case you can pay to be covered for flood damage but still have your claim denied because a subjective determination is made that a certain incident which most people would assume is covered falls - outside of the range of coverage for that particular type of incident. I think most people would reasonably assume that flood damage coverage includes that caused by major storms, but clearly that's not the case. And again - a person has no way of knowing that until its already too late.

As far as it being worthless - if your claim won't pay out based on a subjective interpretation of a natural event that you would otherwise be covered for, and which takes advantage of a 'get out' clause to avoid paying - I'd certainly say its worthless... or at the least of very dubious value.

You do have a way of knowing. You ask. If you are unsure if your being told the truth you have them show you in the policy. I don't get where your coming from fish. 99% of the circumstances will be covered with the average policy. Your house catches fire, they pay. A tree falls on it, they pay. The Katrina event was a once in a lifetime thing. If the homeowner wants to be covered for that then he asks questions, is given the price for that coverage and then decides if it's worth it. It's not up to the insurance company to cover you if you don't ask for it.

While I think 99% may be a bit high, I think you've got it. I think there's a misperception that insurers almost always use some loophole to get out of paying a claim. That's just not true.

[Trumplestiltskin 5,791]

But in this case you can pay to be covered for flood damage but still have your claim denied because a subjective determination is made that a certain incident which most people would assume is covered falls - outside of the range of coverage for that particular type of incident. I think most people would reasonably assume that flood damage coverage includes that caused by major storms, but clearly that's not the case. And again - a person has no way of knowing that until its already too late.

As far as it being worthless - if your claim won't pay out based on a subjective interpretation of a natural event that you would otherwise be covered for, and which takes advantage of a 'get out' clause to avoid paying - I'd certainly say its worthless... or at the least of very dubious value.

Have you never received any payment from an insurer before? How can your insurance be worthless if it pays out claims? You're saying that if your insurer doesn't pay out the particular claim that you would like it to pay then it is worthless? Well, I guess so if that's the standard of determining value. I wish my auto insurance would cover me when I punctured my tire, but it didn't - that doesn't mean it's worthless.

Furthermore, how can an insurer be "taking advantage" of a clause, if that clause is, in fact, written there in black and white?

I don't see what kind of solution you would propose, other than that you want everything to be covered, no worries about exclusions for certain events. That's just fine, but like I said, expect your premiums to skyrocket. I know you wish that the language was less ambiguous, and that's a fair point. But I don't think it's as simple as it sounds.

You get what you pay for!

Or in some cases less than what you pay for (Or in some cases nothing at all).

As you said - the clauses aren't spelled out clearly otherwise very many people wouldn't assume they have coverage when they really don't.

I know how it is - but the fact that this industry pays your wages doesn't mean that they operate in anything less than a bureaucratic, amoral manner.

[Trumplestiltskin 5,791]

But in this case you can pay to be covered for flood damage but still have your claim denied because a subjective determination is made that a certain incident which most people would assume is covered falls - outside of the range of coverage for that particular type of incident. I think most people would reasonably assume that flood damage coverage includes that caused by major storms, but clearly that's not the case. And again - a person has no way of knowing that until its already too late.

As far as it being worthless - if your claim won't pay out based on a subjective interpretation of a natural event that you would otherwise be covered for, and which takes advantage of a 'get out' clause to avoid paying - I'd certainly say its worthless... or at the least of very dubious value.

You do have a way of knowing. You ask. If you are unsure if your being told the truth you have them show you in the policy. I don't get where your coming from fish. 99% of the circumstances will be covered with the average policy. Your house catches fire, they pay. A tree falls on it, they pay. The Katrina event was a once in a lifetime thing. If the homeowner wants to be covered for that then he asks questions, is given the price for that coverage and then decides if it's worth it. It's not up to the insurance company to cover you if you don't ask for it.

What would you ask Gary?

"Is my house covered against flooding?"

Answer "yes"

What you have no control over is whether an extreme weather event will be interpreted as 'man-made'. Your policy cannot possibly spell out that process of interpretation in contractual terms. Its dependent purely on the determination made about a specific incident - not the theory.

In theory you should be covered against flooding. In reality, you aren't.

[GaryC 7]

But in this case you can pay to be covered for flood damage but still have your claim denied because a subjective determination is made that a certain incident which most people would assume is covered falls - outside of the range of coverage for that particular type of incident. I think most people would reasonably assume that flood damage coverage includes that caused by major storms, but clearly that's not the case. And again - a person has no way of knowing that until its already too late.

As far as it being worthless - if your claim won't pay out based on a subjective interpretation of a natural event that you would otherwise be covered for, and which takes advantage of a 'get out' clause to avoid paying - I'd certainly say its worthless... or at the least of very dubious value.

You do have a way of knowing. You ask. If you are unsure if your being told the truth you have them show you in the policy. I don't get where your coming from fish. 99% of the circumstances will be covered with the average policy. Your house catches fire, they pay. A tree falls on it, they pay. The Katrina event was a once in a lifetime thing. If the homeowner wants to be covered for that then he asks questions, is given the price for that coverage and then decides if it's worth it. It's not up to the insurance company to cover you if you don't ask for it.

While I think 99% may be a bit high, I think you've got it. I think there's a misperception that insurers almost always use some loophole to get out of paying a claim. That's just not true.

I have been a home owner for 25 years. I have had several claims for storm damage, smoke damage and water damage. In every case I was paid according to my policy. If I didn't ask for specific coverage then it's my fault and no one else's. In regard to the OP it seems that damage caused by human fault was not covered and was unambiguous. So it seems to me that if they had coverage for storms and the levies didn't break they would have been covered. The levies breaking was something that was not spelled out and therefore not covered. I don't think it was a secret that the city was protected by man-made levies. I know I would have asked if I were covered if they broke.

[Jenn! 918]

But in this case you can pay to be covered for flood damage but still have your claim denied because a subjective determination is made that a certain incident which most people would assume is covered falls - outside of the range of coverage for that particular type of incident. I think most people would reasonably assume that flood damage coverage includes that caused by major storms, but clearly that's not the case. And again - a person has no way of knowing that until its already too late.

As far as it being worthless - if your claim won't pay out based on a subjective interpretation of a natural event that you would otherwise be covered for, and which takes advantage of a 'get out' clause to avoid paying - I'd certainly say its worthless... or at the least of very dubious value.

You do have a way of knowing. You ask. If you are unsure if your being told the truth you have them show you in the policy. I don't get where your coming from fish. 99% of the circumstances will be covered with the average policy. Your house catches fire, they pay. A tree falls on it, they pay. The Katrina event was a once in a lifetime thing. If the homeowner wants to be covered for that then he asks questions, is given the price for that coverage and then decides if it's worth it. It's not up to the insurance company to cover you if you don't ask for it.

What would you ask Gary?

"Is my house covered against flooding?"

Answer "yes"

What you have no control over is whether an extreme weather event will be interpreted as 'man-made'. Your policy cannot possibly spell out that process of interpretation in contractual terms. Its dependent purely on the determination made about a specific incident - not the theory.

In theory you should be covered against flooding. In reality, you aren't.

Again what is your solution? You're right that the policy cannot possible spell out all the scenarios. So what to do? It seems like you want the insurance industry to act in the interest of individuals rather than in its own interest. Well, then we won't have any insurance at all and people can pay for whatever travesty befalls them. Is that more moral?

[Arazia 0]

What would you ask Gary?

"Is my house covered against flooding?"

Answer "yes"

What you have no control over is whether an extreme weather event will be interpreted as 'man-made'. Your policy cannot possibly spell out that process of interpretation in contractual terms. Its dependent purely on the determination made about a specific incident - not the theory.

In theory you should be covered against flooding. In reality, you aren't.

Duval said the policies did not distinguish between floods caused by an act of God — such as excessive rainfall — and floods caused by an act of man, which would include the levee breaches following Katrina's landfall.

But the appeals panel concluded that "even if the plaintiffs can prove that the levees were negligently designed, constructed, or maintained and that the breaches were due to this negligence, the flood exclusions in the plaintiffs' policies unambiguously preclude their recovery."

I don't really understand where your argument comes in. It's clear that in this case the individuals involved did -NOT- pay for flood coverage. It says that regardless of if it was an act of God or a man-made error, their policies still did not cover flood damage. It seems to me it's their own fault for not buying flood protection in an area that is known for hurricanes and is below sea level.

[GaryC 7]

But in this case you can pay to be covered for flood damage but still have your claim denied because a subjective determination is made that a certain incident which most people would assume is covered falls - outside of the range of coverage for that particular type of incident. I think most people would reasonably assume that flood damage coverage includes that caused by major storms, but clearly that's not the case. And again - a person has no way of knowing that until its already too late.

As far as it being worthless - if your claim won't pay out based on a subjective interpretation of a natural event that you would otherwise be covered for, and which takes advantage of a 'get out' clause to avoid paying - I'd certainly say its worthless... or at the least of very dubious value.

You do have a way of knowing. You ask. If you are unsure if your being told the truth you have them show you in the policy. I don't get where your coming from fish. 99% of the circumstances will be covered with the average policy. Your house catches fire, they pay. A tree falls on it, they pay. The Katrina event was a once in a lifetime thing. If the homeowner wants to be covered for that then he asks questions, is given the price for that coverage and then decides if it's worth it. It's not up to the insurance company to cover you if you don't ask for it.

What would you ask Gary?

"Is my house covered against flooding?"

Answer "yes"

What you have no control over is whether an extreme weather event will be interpreted as 'man-made'. Your policy cannot possibly spell out that process of interpretation in contractual terms. Its dependent purely on the determination made about a specific incident - not the theory.

In theory you should be covered against flooding. In reality, you aren't.

You have obviously never owned a home and had to buy insurance. If your sitting there at or below sea level in a hurricane zone your not thinking "what if the dike breaks" then it's your fault. It's just common sense. There is a difference between a flood caused by a foot of rain in an hour and a dike breaking. One is mother nature, the other is man-made.

[Jenn! 918]

What would you ask Gary?

"Is my house covered against flooding?"

Answer "yes"

What you have no control over is whether an extreme weather event will be interpreted as 'man-made'. Your policy cannot possibly spell out that process of interpretation in contractual terms. Its dependent purely on the determination made about a specific incident - not the theory.

In theory you should be covered against flooding. In reality, you aren't.

Duval said the policies did not distinguish between floods caused by an act of God — such as excessive rainfall — and floods caused by an act of man, which would include the levee breaches following Katrina's landfall.

But the appeals panel concluded that "even if the plaintiffs can prove that the levees were negligently designed, constructed, or maintained and that the breaches were due to this negligence, the flood exclusions in the plaintiffs' policies unambiguously preclude their recovery."

I don't really understand where your argument comes in. It's clear that in this case the individuals involved did -NOT- pay for flood coverage. It says that regardless of if it was an act of God or a man-made error, their policies still did not cover flood damage. It seems to me it's their own fault for not buying flood protection in an area that is known for hurricanes and is below sea level.

That's how I understand it as well. It seems the argument has been taken out of the context of this particular situation however, and put into the hypothetical situation where someone *did* purchase flood coverage and was denied a claim due to an exclusion that was somewhat ambiguous.

[Jenn! 918]

Oh, and just an interesting note...on average insurers actually *lose* money writing Homeowners policies. They mainly do it to attract people to purchase their auto insurance with them as well.

Insurers don't sit around twirling their mustaches scheming how they can rip off their customers. In fact, customer retention is extremely important.