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Friday, September 09, 2005

Law - More on Katrina insurance issues

"Insurers Are Urged to Pay Valid Claims" is the headline to this story today in the Washington Post. Some quotes:

Putting more pressure on insurers to pay damage claims from Hurricane Katrina, Mississippi's insurance commissioner has told carriers that they will be required to prove to both regulators and homeowners that damage was caused by water and not by wind if they deny a claim.

On Wednesday, Lousiana's insurance commissioner also urged a large group of insurers and reinsurers to pay all valid claims. In many cases, the key to deciding which homeowners recover will be whether wind or water caused the damage. * * *

"In some situations, there is either very little or nothing left of the insured structure, and it will be a fact issue whether the loss was caused by wind or water," Mississippi Insurance Commissioner George Dale said in a bulletin to insurers dated Wednesday. " . . . I expect and believe that, where there is any doubt, that doubt will be resolved in favor of finding coverage on behalf of the insured."

Dale's position startled many insurers and reinsurers, who are concerned they are being pressured to pay claims for damage they did not insure.

Even in Florida, with its many hurricanes, regulators "haven't ever tried to do that," said Brad Kading of the Reinsurance Association of America.

Some industry officials said they did not view Dale's action as alarming.

"I think this is just a cautionary bulletin to lay out what his expectations are," said Julie Pulliam of the Atlanta office of the American Insurance Association, a trade group. "He has been very good to work with, and we expect that to continue. We are at the very beginning of this process. There's a lot to come."

The Wall Street Journal had a very good story front page story yesterday headlined: "Paying for Flood Damage Looms as Big Challenge: Many in Gulf Coast Region Had Little or No Insurance; A New Compensation Fund?" It is reprinted here in the Pittsburgh Post-Gazette.

Access the ILB's most recent earlier entry on the insurance issues here.

Posted by Marcia Oddi on September 9, 2005 07:44 AM
Posted to General Law Related