Transcript of CNN's "Road to Recovery"
CNN
September 13, 2005

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CNN'S CAROL COSTELLO: Not many people would. So, how can hurricane victims make sure they get treated fairly by their insurance companies?

Here to help us answer that question is Joanne Doroshow. She's executive director of the Center for Justice and Democracy.

First of all, Joanne, is there anything the president can do?

JOANNE DOROSHOW, CENTER FOR JUSTICE AND DEMOCRACY: Well, sure. In fact, what he and FEMA ought to be doing right now is making sure -- pressuring these insurance companies to pay these claims right off and not delay.

One of the issues that he just discussed was whether flood insurance or wind insurance or homeowners' policies are going to cover this damage. These claims need to be paid right now, and then the insurance companies and the government can figure out what the allocation should be.

Flood insurance is covered by -- is underwritten by the federal government.

COSTELLO: Oh. We'll get to that subject a little later. But first of all, I want to talk about the numbers of people calling your organization complaining about their insurance companies. What are you hearing?

DOROSHOW: Well, we set up a hotline under our coalition group, Americans for Insurance Reform. And we're already hearing from people who are having terrible problems even getting their agents or the companies on the phone to begin with.

But also, most people under their homeowners' policies are entitled to living expenses right off to cover their hotel and food that they are purchasing right now.

COSTELLO: And they say they are not getting that money.

DOROSHOW: Some people are not. You have situations, for example, with one company, Travelers. They have one office in Baton Rouge. They're asking all of their policyholders to travel to Baton Rouge to file these claims.

You know, it's hard enough for anybody to do that, let alone if you're sick and elderly. So, they're unable to get the money that they should be getting right off.

So, these are very, very difficult circumstances for people.

COSTELLO: I know. Let's get back to the flood insurance, because the insurance companies would say, if you didn't buy flood insurance, then we don't cover you for flood damage. Now, during a hurricane when the wind blows down your house, that's obviously hurricane damage. But if there's a storm surge, and your home is flooded, that's probably not covered, right?

DOROSHOW: Well, there's going to be wind and rain damage to your home before the storm surge. So, whatever percentage would come under the wind damage should be paid by the insurance companies.

But what we're saying is they need to pay these claims right now. Then figure out what the allocation is, instead of waiting and going through a long process. Meanwhile, these people are not going to get any money at all.

You know, and there is... COSTELLO: But you know there is going to be arguments. You know that a lot of homeowners will be emotionally distressed anyway. A lot of them will be stretched very thin financially. And they've got to, you know, look at this insurance agent and say, look, this damage was caused by the hurricane.

I mean, what can they say? What should they say to get the insurance agent to understand their point of view?

DOROSHOW: Well, what's very, very important, first of all, is for everybody to keep very good records of everything. Now, those people that are back in their homes or never left -- I mean, there are many people in damaged homes. They need to document everything. They need to immediately list what all of their possessions were, anything that was damaged. They need to get as much justification for that as they possibly can.

And then, if the insurance agent or claims adjuster denies the claim, they need to ask exactly what in that policy is causing them to deny that claim or lowball it.

COSTELLO: So, what if they say, you know, you didn't have flood insurance; there's nothing we can do?

DOROSHOW: Well, then -- you know, then we can complain to the -- if that's true, that's one thing. It may not be true. There may be all kinds of abuses going on. In fact, we're asking the government to step up and exercise some oversight here, because of the potential for abuse here.

The reason there is potential is because if you're an insurance company, and you know the federal government is covering the flood insurance claim, and your reserves are covering homeowners, well, there's a real conflict of interest there. And you can see a lot of abuse where they're going to be over-declaring things as flood as opposed to wind damage.

So, what we're doing is we're trying to maintain a database of complaints to make sure that these kinds of abuses don't occur, and report these abuses to state insurance departments. Keep the interest hopefully among the media in all of this, because I think having the oversight is the only way to keep them somewhat honest in all of this.

COSTELLO: Well, I'm sure in the weeks to come we're going to be hearing from many angry homeowners, because there's bound to be problems. Just out of curiosity, how many calls are you getting?

DOROSHOW: Well, we opened our hotline yesterday, and we immediately got 30 calls. We expect that we're going to be getting many, many calls today and for the rest of the week. People are having a real hard time right now with their insurance companies.

COSTELLO: Well, we'll keep in touch. Joanne Doroshow, executive director of the Center for Justice and Democracy. Thanks for joining us this morning.

DOROSHOW: Thank you.

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