Two scenarios about how the federal government might help with insurance claims in the wake of Hurricane Katrina were suggested at a town hall meeting on Monday in D’Iberville, Miss. by U.S. Rep. Gene Taylor.
If the insurance companies ask for a bailout from the federal government, Taylor told the Clarion Ledger that a condition should be that damage caused by the storm surge be classified as wind-driven water damage. He suggested another option would be to allow homeowners to retroactively buy into the national flood insurance program.
“There are lots of very smart people at the Stennis Space Center who will help us make a scientific case that this was wind-driven water,” Taylor said. “We all know that 8 inches of rain isn’t going to cause that kind of damage.”
About 100 people filled the D’Iberville City Council meeting room, where the carpets had been taken out and drywall damaged by flooding had been cut away. Many of the people in the meeting room said they had been told by their insurance companies that the damage was not insured because it was caused by water, not wind.
State Insurance Commissioner George Dale said he wishes companies could pay all of the claims, but doesn’t think it is feasible or advisable, especially with cost estimates approaching $40 billion.
State Attorney General Jim Hood has filed a lawsuit in Hinds County to force insurance companies to pay policyholders’ damage whether caused by wind or water from the hurricane. He is seeking a temporary restraining order against all insurance companies with policies that insure against property loss and damage from storms and hurricanes but exclude loss or damage from water.
Taylor said he has spoken with President Bush and with Sens. Thad Cochran and Trent Lott about possible solutions. Congress would likely decide on the matter before the end of this session, he said.
He said he also would push for federal regulation of the insurance industry. He said states, which currently regulate the industry, do not have the resources to do it properly.
Dale commented he didn’t think allowing the federal government to regulate the insurance industry is a good idea. “Just look at how they did regulating the Savings and Loans industry,” Dale said.
Taylor also has asked for federal assistance in rebuilding infrastructure. “I’m only asking for the people of Mississippi exactly what we’re doing for the people of Iraq,” he said.
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