Pattern of Greed 2007 Insurers' Profits Over Policyholders

Recently, the American Association for Justice released a report showing that, after natural disasters such as hurricanes, the insurance industry has failed to pay even undisputed, “fair and valid” claims, while raking in profits in excess of $100 billion in two years.

The account is chilling. Here are some excerpts:

"Bob Kochran CEO of an engineering firm assessing Katrina damage for State Farm, said that he was asked to alter reports that the company did not agree with. In order to keep the State Farm contract, Kochran agreed to tell his engineers to "re-evaluate each 0f our assignments." One of the engineers, Randy Down, responded in an email, "I have a serious concern about the ethics 0f this whole matter.I really question the ethics 0f someone who wants to fire us simply because our conclusions don't match theirs." State Farm's attempt to unduly influence the engineers was exposed during litigation in Jackson, Mississippi."

.....

"Mississippi engineer Ken Overstreet similarly claimed that his reports on Katrina damage were altered by the insurance company he worked for on at least four occasions. In a report on the house 0f Mississippians Hubert and Joyce Smith, Overstreet wrote, "The winds out of the east would have racked the entire structure to the west and simply lifted the footings up." However, the report that the Smiths received said, "Due to the extent 0f the structural damage to the residence, the storm surge accounted for the damage." When Overstreet saw the final report he informed the Smiths that the conclusions had been changed. The Smiths' insurance company settled with them in March 2007."

Read: "Pattern of Greed 2007: How Insurance Companies Put Profits over Policyholders." American Association for Justice, 08/28/2007

I ain’t got no money: Insurer Offers Fire Protection for the Rich

Sun Valley is an affluent resort community in central Idaho. Folks in Sun Valley don’t sing, “I ain’t got no money.” That’s because there’s lots of money in “them thar hills.”

The “wealthy residents” of Idaho’s Sun Valley are getting some added protection from recent wildfires in the form of a special wildfire protection unit deployed by insurer AIG (American International Group, Inc.).

At the cost of $10,000 a year, AIG will coat the homes of Sun Valley’s rich and famous with a fire retardant gel. AIG says their “service” makes “fiscal sense” rather than reimbursing owners for the cost of a multimillion dollar home. William Yardly, The New York Times 08/28/2007 Read Article: The New York Times

Blanco to Testify in St. Rita Nursing Home Trial

Here's a very interesting criminal defense move.

A spokesman for La. Atty. Gen. Charles Foti said the St. Rita's nursing home trial is the first case in Louisiana in which the governor is compelled to testify.

Foti was unsuccessful in blocking defense efforts to call Gov. Blanco in the trial against the nursing home owners charged with the deaths of 35 patients in post-Katrina flooding. Defense attorneys argue that Blanco and other state officials failed to organize an effective evacuation.

Well, if Blanco should testify, then so should FEMA's Mike Brown and Pres. Bush. After all, the Bush administration had the resources and expertise to manage the disaster, but didn't.

Emily Kern, The Advocate 08/14/2007 Read Article: The Advocate

The smoking gun! Allstate Wants to Seal Hurricane Claims Manual

Those protecting working families across America have asked U.S. District Court in New Orleans to keep Allstate Insurance documents open to the public from the first federal Katrina-related federal trial in Louisiana. The smoking guns include Allstate's claims-handling manual and instructions to adjusters.

The Foundation for Taxpayer and Consumer Rights and Public Justice filed a motion last week to oppose Allstate's request to seal key documents from Weiss v. Allstate, the case in which Slidell homeowners got a $2.8 million judgment against the insurer.

Weiss ultimately settled after the company asked for a new trial or a reduction of what it called an "irrational verdict." The groups say keeping the records public is a national issue because it shows how Allstate handles claims after a natural disaster.

It will be interesting to see if conservative judges come to the aid of insurers by hiding evidence of bad faith insurance practices.

Rebecca Mowbray, New Orleans Times-Picayune 08/14/2007 Read Article: New Orleans Times-Picayune

Adding insult to injury! Insurers to Ask for Homeowners Rate Increases

Horace Mann Insurance Co. group and Amica Mutual Insurance Co. want to increase YOUR homeowners insurance by 21. 6 percent and 20.6 percent.

The request came at Wednesday’s meeting of the Louisiana Insurance Rating Commission.

Business Staff, The Advocate 08/13/2007 Read Article: The Advocate

Conservatives Judges Stick It To La. Working Families & Back Insurers

The Federal 5th Circuit Court of Appeal, which is housed in New Orleans, stuck it to Louisiana working families again and unanimously ruled in favor of the insurance industry.

Using infamous ipse dixit reasoning, a cadre of conservative judges said homeowners insurance companies like State Farm and Allstate don’t have to pay the full value of the policy when a home is destroyed by a combination of flooding and hurricane wind damage.

Ruling came down in Chauvin v. State Farm Fire & Casualty. In Chauvin, State Farm argued that a draconian trial court correctly interpreted the policy language to mean that State Farm wasn’t responsible for damage caused by “manmade flooding from the levee breaks.”

Wow!!!!

Think about that for a minute. The court’s ipse dixit reasoning can be used to exonerate every insurance company! The guy who hit you from the rear didn’t cause your injury; the injury was manmade by the automobile company who failed to provide occupant protection.

Ah...justice is a fickle thing...

Rebecca Mowbray, New Orleans Times-Picayune 08/08/2007 Read Article: New Orleans Times-Picayune

Are Federal Courts Controlled By Judges Who Protect Corporations? Just Ask These Katrina Victims.

For a long time, I've argued that working families can’t get a fair trial in federal court,because federal courts protect corporations. If you're a “doubting Thomas,” take a look at what happened to Louisiana working families in the U.S. 5th Circuit Court of Appeals.

A three-judge panel ruled that Hurricane Katrina victims whose homes and businesses were destroyed when floodwaters breached the levees couldn’t recover money from their insurance companies for flood damages.

Using the ever-popular ipse dixit argument, the three-judge panel reasoned, "…the flood exclusions in the plaintiffs' policies unambiguously preclude their recovery."

As a result, a dozen insurance companies were handed windfall-profits, while working families got the shaft.

The ruling overturns U.S. District Judge Stanwood Duval decision that the policy language to exclude flood damage was ambiguous. Associated Press, New Orleans Times-Picayune 08/02/2007 Read Article: New Orleans Times-Picayune