Insurance Transparency Project

Uncovered Perils and Unwarranted Risks,

This Insurance Journal item says that the head of the nation’s largest insurance agency trade group, the “Big I,” believes that the public has a false perception that the insurance industry “failed” post-Katrina, and that insurers must do a better job telling their side of the story.

” ‘The reality is that overwhelming majority of the Katrina claims have been settled. Surveys that have been made that actually indicate that the majority of the people are satisfied with the way they were treated and the way they were paid,’ ” says Miami insurance agent Alex Soto, who is the elected president of the Independent Insurance Agents and Brokers.

‘If you on the other hand listen to the press, listen to the stories, listen to the people, who are getting in front of the microphones, it is a constant barrage of the criticism, of hyperbole, that seem to tell the story to the American people that almost no one has been paid, and that everyone is very dissatisfied.’ “

Listen, regular ITP readers know what I think. Plenty of evidence suggests that insurers, in particular State Farm and Allstate, have performed not just poorly but in bad faith.

The evidence includes:

The Broussard case, in which Judge Senter in Gulfport federal court found State Farm deliberately didn’t pay any wind damage despite its own expert conceding wind damage.

Weiss, in which a New Orleans federal jury found that Allstate didn’t pay for wind, also in bad faith.

State Farm’s own “moratorium” on the use of Haag Engineering from further work in the gulf after a jury in Oklahoma found the very use of Haag constituted a “malicious” practice.

The several thousand of lawsuits in Gulfport and New Orleans federal court

State Farm’s agreement in Woullard, since shelved, to reopen 35,000 claims in Mississippi.

State Farm’s agreement in Louisiana to open 350 cases.

Depositions by independent engineers and former executives at State Farm’s main adjuster, E.A. Renfroe, testifying that engineering reports finding wind damage were altered or destroyed wholesale.

This does not include the government investigations, including criminal probes by Attorney General Hood and the U.S. attorney, Dunn Lampton, in Jackson, probes by the Department of Homeland Security, the House Financial Services Committee, and market-conduct examinations by the Louisiana Department of Insurance.

(Background on all of the above is available using the powerful search function on www.insurancetransparencyproject.com)

But that’s not the point. The point is, we still don’t know.

How many claims were denied in full or in part? How much was paid per policy? How much was paid compared to the policy limits? How much was paid compared to policyholders’ demands or proofs of loss? Where were wind claims paid and not paid? (Never mind why, just where?)

If you really want to get depressed, read the reader comments under the Soto story. Without data, all we’re left this is: Did-not, did-so.

Anon: “What, what, what!?! You mean the media misrepresents, misreports, spins, exaggerates, or otherwise fails to give the whole story? You mean they can actually make something worse than it really is? You mean they ignore good news to paint the most bleak picture possible? I’m sure there’s a lesson to be learned here about other news stories and current events.”

Or: