The Insurance Industry's Inherent Conflict of Interest

The Insurance Industry's Inherent Conflict of Interest

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The Insurance Industry's Inherent Conflict of Interest

ShareThis NFIP contracts with private insurance companies to sell flood policies backed by the federal government, and it also allows those companies to handle the claims after a disaster. When it comes to adjusting claims for each policy after a hurricane hits, however, the private insurance companies adjust claims for both wind and flood-related property damage. The General Accounting Office (GAO), the Department of Homeland Security (DHS) Inspector General, and anyone else who has taken an honest look at insurance claims practices after Hurricane Katrina found that the insurance companies have an inherent conflict of interest when allowed to decide whether hurricane damage should be blamed on flooding covered by the federal government or on hurricane winds covered by the insurers themselves. (See Rebecca Mowbray articles in the New Orleans Times-Picayune.) GAO, et al., also found that NFIP did not perform adequate oversight to prevent insurers from billing NFIP for some losses that should have been covered by the insurers' wind policies. The insurance industry's inherent conflict of interest is stacked solidly against home and business owners who have faithfully paid premiums for their homeowners' policies and fully expect to be paid for wind-related damage to their properties. Furthermore, this inherent conflict of interest is stacked against the American taxpayers, who subsidize the federal flood insurance policies, also expect to be charged only for flood-related damages. Furthermore, the dispute over whether wind or flood or come combination of the two damaged or destroyed property unnecessarily delay the recovery for families, businesses, and whole communities. One policy. One premium. One claims adjuster. Protecting America's home & business owner. Protecting America's taxpayers. Rep. Taylor's Multiple Peril Insurance Act of 2009 solves this inherent conflict of interest through permitting America's home and business owners to purchase one policy for both types of property insurance coverage. Coastal America's Homeowner Insurance Crisis Multiple Peril Insurance Basics Water/Wind Dispute: The Eye of the Insurance Storm The Insurance Industry's Inherent Conflict of Interest Anti-Concurrent Causation: Insurer's Hidden Weapon Against Homeowners Evidence of Insurers' Defrauding National Flood Insurance Program (NFIP) Insurers Outsourced Their Cost of Living Expenses to American Taxpayers Insurance Executives: Pocketing Premiums, Padding Profits, & Passing Out Big Salaries and Bonuses Insurance Companies Exempt from Nation's Anti Trust Laws Back to the Multiple Peril Insurance Act Home Page

Multiple Peril Insurance Act of 2009: The Facts

Multiple Peril Insurance Act of 2009: The Facts

Multiple Peril Insurance Act of 2009: The Facts

ShareThis I am asking Congress to consider legislation that would allow the National Flood Insurance Program to include an option on wind so American home and business owners can have one property insurance policy for both wind and flood. Under the rules of this House, it will be done in a way that pays for itself, thus any argument that it would be taxpayer-subsidized is eliminated. - Rep. Gene Taylor Multiple Peril Insurance Act of 2009 Multiple Peril Insurance Act of 2009 See also: Multiple Peril Insurance Basics Summary The Multiple Peril Insurance Act would allow coastal homeowners to buy comprehensive insurance and know that hurricane damage will be covered without lengthy legal disputes over how much damage was caused by wind and how much was caused by flooding. After Hurricane Katrina, insurance companies overbilled taxpayers and underpaid homeowners by blaming flooding for some damage that had been caused by hurricane winds and wind-driven debris. The bill will reduce future property damage by requiringparticipating communities to adopt International Building Codes. Limits of Coverage Residential coverage $500,000 for structure $150,000 for contents and loss of use Nonresidential coverage $1 million for structure $750,000 for contents and business interruption Windstorm insurance would be available only where local governments adopt and enforce the International Building Code or equivalent building standards. Premiums Premiums for wind coverage would be risk-based and actuarially sound. The Congressional Budget Office has agreed that the program would pay for itself. The federal multiple peril insurance program will spread the risk geographically to form a much more stable insurance pool than state wind pools that cover a much smaller area through which it spreads the risk. Benefits to American Taxpayers The Multiple Peril Insurance Act would benefit taxpayers by providing for prompt and full payment for wind and water damage. That will reduce the need for FEMA trailers, housing vouchers, subsidized loans, tax deductions, and other federal assistance. The bill requires premiums to be risk-based and actuarially sound so that the program pays for itself. CBO scored the bill as budget neutral. Opportunities For Private Insurance Companies Today, insurance companies continue to withdraw from the nation's coastal marketplace leaving American property owners without access to affordable and dependable insurance coverage. Under the federal multiple peril insurance program, insurance companies could return to coastal communities to sell fire, theft, and liability coverage, and excess coverage above the $500,000 or $1 million federal policy limits. Property Owner Peace of MindBenefits Property owners would be able to buy insurance and know in advance that hurricane damage would be covered regardless of whether the wind, water or some combination of each caused the property damage. Coastal America's Homeowner Insurance Crisis Multiple Peril Insurance Basics Water/Wind Dispute: The Eye of the Insurance Storm The Insurance Industry's Inherent Conflict of Interest Anti-Concurrent Causation: Insurer's Hidden Weapon Against Homeowners Evidence of Insurers' Defrauding National Flood Insurance Program (NFIP) Insurers Outsourced Their Cost of Living Expenses to American Taxpayers Insurance Executives: Pocketing Premiums, Padding Profits, & Passing Out Big Salaries and Bonuses Insurance Companies Exempt from Nation's Anti Trust Laws Back to the Multiple Peril Insurance Act Home Page

Evidence of Insurance Companies Defrauding the National Flood Insurance Program (NFIP)

Evidence of Insurance Companies Defrauding the National Flood Insurance Program (NFIP)

Evidence of Insurance Companies Defrauding the National Flood Insurance Program (NFIP)

ShareThis [Click here to read the 24 documents that document Evidence of Fraud by Insurers Handling Katrina Losses With Both Wind and Flood Damage.] After a major hurricane such as Katrina, there are hundreds of thousands of properties where it is not possible to clearly distinguish the wind damage from the flood damage. The wind/water controversy comes down to a classic question of who pays. Private insurance companies collect premiums to cover wind damage to property. The National Flood Insurance Program (NFIP), an American taxpayer subsidized progam, covers flood. Every legal precedent in every state and federal court places the burden on insurers to prove that property damage is excluded before insurers can deny coverage to its policyholders.Under the prior administration, however, the NFIP maintained weak oversight. Insurers took advantage of that fact and shifted the burden of proof away from themselves and onto the shoulders of America's home and business owners. As a result, insurance companies blamed all of the hurricane's wind and water damage on the flooding alone. Then they denied the wind-damage claims of their own policyholders unless homeowners could prove that their property damage was caused by wind alone. Private insurance companies billed the federal taxpayers--via the NFIP-- for all damage where flooding was at all possible while paying wind claims only where wind was the only possible cause. In every case, the benefit of the doubt favored the insurance company at the expense of taxpayers and homeowners, while NFIP did nothing to protect either. Insurance companies paid for wind damage as far north as Memphis, Tennessee, while denying wind damage claims for home and business owners along the Gulf Coast, which took the brunt of the hurricane force winds. Katrina: Before and After Hadden Family Residence Bay St. Louis, Miss. Amount of Insurance $650,000 Amount Prior to Legal Action: $0 Click for more before and after photos. NEXRAD radial velocity data indicated peak winds near the surface of around 140 mph in the eyewall at time of landfall. * * * the maximum sustained wind speeds peaked near 175 mph and remained at that speed until the afternoon.

Insurance Reform - Louisiana

Insurance Reform - Louisiana: "Insurance Reform - Louisiana"