Insurers Blew Katrina Response, Report Claims
NU Online News Service
January 13, 2006

The insurance industry's reaction to Hurricane Katrina was insufficient and, in some cases, only made the situation worse for policyholders, according to a report issued yesterday by the group Americans for Insurance Reform.

Insurance trade groups denied there was any failure and the American Insurance Association in Washington labeled the study "untrue, irresponsible and reckless." 

Joanne Doroshow, one of AIR's co-founders and the executive director of the Center for Justice and Democracy, said the report "shows that many policyholders who were exhausted, traumatized, and without food, water or a roof over their heads, looked to their insurance carriers to come to their aid as they struggled to survive-but what many found was not help at all, but rather resistance by insurance companies to pay them anything, leaving victims frustrated and angry, not to mention destitute."  AIR said the report, titled "The Insurance Industry's Troubling Response to Hurricane Katrina," was based on "hundreds of calls" to its toll-free hotline established Sept. 12, 2005.

…

AIR said among the most common problems consumers faced were attempts to avoid liability by insurers claiming that all damages were caused by flooding, which is not covered in homeowners' policies.  Additionally, the AIR study said that many policyholders complained of getting a slow response that allowed for more damage from Hurricane Rita or no response from their insurers at all.  "Insurance should be a policyholder's road to recovery at times of personal crisis," said Robert Hunter, director of insurance for the Consumer Federation of America and an AIR co-founder. "After Katrina many insurance companies have too often been more like stone walls, blocking the way for policyholders to recover." 

For a copy of the complete article, contact AIR.