Katrina Insurers Flayed; Consumer Coalition Says Industry Was Slow, Callous After Storm
Saint Paul Pioneer Press (Minnesota)
January 12, 2006

The insurance industry's response to Hurricane Katrina showed a "pattern of callousness, unfairness and generally inept performance," according to a report released Wednesday by Americans for Insurance Reform (AIR), a national coalition of consumer groups.

This summer, Katrina killed more than 1,300 people on the Gulf Coast and left thousands of people homeless in one of the nation's worst natural disasters. Consumers filed more than 1.6 million insurance claims, causing insured losses of about $35 billion.

The AIR report was based on hundreds of consumer complaints to a toll-free insurance hot line.

"I've been involved with hurricane response since the '60s, and this is probably the worst response of insurance companies I remember," said Bob Hunter, AIR co-founder and director of insurance for the Consumer Federation of America. The report paints a "very distorted picture," said Jeff Brewer, a spokesman for the Property Casualty Insurers Association of America. He noted that more than 10,000 insurance adjusters were in the field, and they couldn't access the worst hit areas for weeks.

The report highlighted complaints for 11 insurers, including Travelers, a brand of personal insurance sold by St. Paul Travelers Cos.; Allstate; State Farm; and USAA.

In St. Paul Travelers' case, one Louisiana resident reported to AIR's hot line that company representatives told her 78-year-old mother to go to Baton Rouge, La., or Gulfport, Miss., to pick up a check for "additional living expenses" after her New Orleans home flooded.

For a copy of the complete article, contact AIR.