Insurance Companies Dragging Their Feet

Our friends at Alabama Watch, a consumer watchdog group, are members of Americans for Insurance Reform, which has set up a toll-free Katrina Insurance Hotline (1-888-450-5545; staffed M-F, 10 am to 6 pm EST). AIR reports they're getting a flood (pardon the expression) of calls from people having problems with their insurance companies (surprise, surprise). Among the problems:

*** "Insurance companies are waffling about whether they will pay policyholders for certain types of damage. For example, many policyholders have policies covering wind and rain damage, but not flooding."

*** "AIR has received many calls from Louisiana and Mississippi residents who are insured by smaller insurance companies (not the major companies like State Farm, Allstate or Travelers). Their insurance carriers are saying they are unwilling to supply policyholders with immediate living expenses until a claims adjuster has inspected their property. At the same time, these insurance representatives are unwilling to provide policyholders with even a broad estimate of when such an inspection might happen."

This is why the issue of financial hardship for Katrina victims -- especially those going deeper into debt in the shadow of the bankruptcy bill -- is such a big deal, and why the right-wing response that "they can just collect insurance" is not the answer.

"The fact that the insurance industry should even be questioning their obligation to pay these claims is the height of corporate irresponsibility," said Joanne Doroshow, AIR co-founder and Executive Director for the Center for Justice & Democracy. "What is so morally outrageous about this is the fact that the property-casualty insurance industry made more money last year than ever in its history. While the rest of the country is emptying its pockets to help these victims, the insurance industry is discussing how to pocket more money as victims face financial ruin. This is unacceptable."