People Get Ready

[ make levees, not war ]

Insurers gamble with house odds

Posted by schroeder915 on June 13, 2006

CorpWatch:

The insurance industry says it has settled over 90 percent of its Hurricane Katrina claims, proving it’s meeting its obligations to policyholders. But consumer advocates say insurers settled numerous claims for only a fraction of the actual damages, using numerous exclusions to reduce payouts. Insurance modeling firm ISO estimates Louisiana had $24.3 billion in insured losses, but the state department of insurance says only $12.5 billion had been paid out as of the end of April, the last month for which figures were available.

Without enough money from their insurers to rebuild, homeowners are left with two choices: Give up and leave, or else rebuild by hand, using their savings to pay for labor and materials. …

Part of what really rankles consumers is the record profits property-and-casualty insurers are posting despite the unprecedented losses inflicted by Katrina.

The industry cleared a $43 billion profit in 2005, an 11.7 percent increase over the previous year and a 15-year high, according to the trade group, the Insurance Information Institute. …

But insurers say the profit numbers are only half the story: Nearly half the $58 billion in insured losses along the Gulf Coast resulting from last year’s hurricanes were absorbed by reinsurers, companies that insure insurance companies. …

[Eric] Moskau, who is living in Idaho with his wife and two boys, literally hasn’t been able to sit still since Allstate cut him the check for $10,113.34 several months ago. He still does not know what to do with his buckled home, for which he is still paying a $3,500-a-month mortgage

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4 Responses to “Insurers gamble with house odds”

  1. BadTux said

    The insurance companies are literally wanting to pass the buck — to the mortgage lenders. People aren’t gong to pay two mortages (one on a house they can’t live in, one on the house they bought elsewhere) forever. They’re gonig to default. And when they default, the mortgage lender ends up holding the bag, especially if the person moved to a state like Texas that does not allow garnishments. Hey, this means that the person has ruined credit, but at least the insurance companies get record profits! And so the rich get richer, and the middle class gets reamed. But then, that’s the story of the last 25 years, ever since President Reagan took office and reversed decades of policy that rewarded people for working their way up into the middle class in favor of policy that punished working people. Ole’ Saint Ronnie shifted revenue from income taxes to payroll taxes — i.e., dropped income taxes by an astounding amount (income taxes are owed both on money from work and money from investments and trust funds and etc., albeit at a lower capital gains rate if the investment is held more than a year), then tripled payroll taxes, which are only paid by working people, then “borrowed” that payroll money from the Social Security trust fund to pay the “deficit”… all smoke and mirrors, my friend. Smoke and mirrors. Just a backhanded way to slap working people across the face. Bend over, please, working people of America, your government has somethin’ fer ya!.

    So now here we go again, because when the banks go boo-hoo’ing to the Feds about all their losses, guess who’s going to pay for the bailout? that’s right, you and me. And the insurers and the bankers will laugh all the way to the Caymen Islands banks where they stash their loot… and all those ruined people? They don’t really exist, do they? After all, like Stalin said, no people, no problem! Except now we “erase” people the new-fangled way, by simply writing them out of the news and out of public consciousness. Stalin would be proud!

    -BT

  2. Schroeder said

    Wow! What an excellent, sweeping judgment against the corporatization of American politics. I totally agree. Well done, and THANK YOU for sharing.

  3. Marco said

    Good post and comments!

  4. Rob said

    badtux:

    Ditto. You’ve pretty much summed it up, haven’t you? At this point, I wouldn’t be surprised if “those people” in power legalized rape and slavery. Hey, we already have the functional equivalent of indentured servitude to credit agencies, so why not expand the bankruptcy bill to allow Them That Owe to pay off their debts by dirt farming?

    But anyway. I have several friends who are dealing with the insurance cluster fuck here. It’s abominable. The Carr (sp?) family of public adjusters on WSMB 1350 details the horrors every Saturday. A republican friend of mine who at this point would vote for a sock over a Bushevik listened to the show and hired them to help her fight the ridiculous interpretation of policy that her insurance company put forth. Okay, yes, it’s a finger in a dissolving dyke, but at least there’s that.

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