Insurance companies save $1 billion! – Eat it, Katrina victims!

When President George W. Bush stood before the nation and told people in Minnesota that he and the federal government would help rebuild the 35W Mississippi River Bridge, many serious domestic policy experts nodded solemnly, which is serious-domestic-policy-expert speak for “Oh no, he didn’t!”

Luckily for Bush, victims of Hurricane Katrina mostly ignored the remarks, due to the fact they don’t have homes, let alone televisions to put into them. And thanks to a federal judge, they will continue to not have homes, but insurance companies will get to keep about $1 billion.

‘Katrina victims lose in appeals court’

NEW ORLEANS (AP) – Hurricane Katrina victims whose homes and businesses were destroyed when floodwaters breached levees in the 2005 storm cannot recover money from their insurance companies for the damages, a federal appeals court ruled Thursday.

The case could affect thousands of rebuilding residents and business owners in Louisiana. Robert Hartwig, chief economist at the industry-funded Insurance Information Institute in New York, said in June that a ruling against the industry could have cost insurers $1 billion.

‘This event was excluded from coverage under the plaintiffs’ insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written,’ Judge Carolyn King wrote for a three-judge panel of the 5th U.S. Circuit Court of Appeals.
As a result, the panel found those who filed the suit ‘are not entitled to recover under their policies,’ she said.

More than a dozen insurance companies, including Allstate (NYSE:ALL) and Travelers, were defendants.

The decision overturns a ruling by U.S. District Judge Stanwood Duval Jr., who in November sided with policyholders arguing that language excluding water damage from some of their insurance policies was ambiguous.

Duval said the policies did not distinguish between floods caused by an act of God — such as excessive rainfall — and floods caused by an act of man, which would include the levee breaches following Katrina’s landfall.

So remember, those of you with Allstate – you’re in good hands. And those hands will flip you the finger rather than pay you a cent if they can find a sympathetic judge.

In the end, though, those whose homes and lives were devastated by Katrina have little to worry about. The President of the United States promised to help them. And when he makes a promise, he mea … ok, sorry, just messing with you. They’re screwed.

–WKW

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