U.S. Sen. Chris Dodd, a Democratic presidential hopeful, said he’s angry with the insurance industry’s response to the 2005 Gulf Coast hurricanes and said Mar. 9 he will hold senate committee hearings on insurance issues.
Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs, said he expects to hold hearings on April 11 either in Washington or the New Orleans area.
Insurance problems, including cancellations, disputes over coverage and high costs, hinder recovery and could happen in any coastal state that is vulnerable to natural disaster, including his home state of Connecticut, Dodd said.
“This is not a local issue. It’s a national one,” Dodd said, saying that more than 60 percent of the country’s population lives within 100 miles of the coast. “What happened here could happen in my state. It could happen to an awful lot of people in this country.”
While hurricanes are usually a threat far south of Dodd’s home state, they are not unheard of there. A hurricane that hit Sept. 21, 1938 is considered the state’s worst natural disaster of the 20th century, blamed for 682 deaths, according to the Thomas J. Dodd Research Center at the University of Connecticut.
Dodd singled out Allstate insurance for criticism, noting the Louisiana Department of Insurance’s contention that the company made incomplete “drive-by” inspections of homes and canceled policies after wrongly concluding that the houses were abandoned.
Allstate has denied sending cancellation notices to policyholders without inspecting their property, and said the inspections were thorough.
Louisiana Insurance Commissioner Jim Donelon said earlier this week that Allstate could face fines if it fails to reinstate the policies in question. Allstate appealed Donelon’s order to an administrative law judge on Mar. 8. The Northbrook, Ill.-based company questioned whether Donelon overstepped his power and whether he had properly investigated the matter.
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