Hell hath no fury like a U.S. Senator scorned! Thats the message insurers heard loud and clear last week when they learned that Sen. Trent Lott, R-Miss.who just happens to be suing his homeowners insurerhad skillfully slipped language into next years appropriations bill for the U.S. Department of Homeland Security requiring the agency to investigate the industrys conduct in handling Hurricane Katrina claims.
To his credit, Sen. Lott doesnt make any bones about being objective on this subject. I dont profess to be impartial, he told The New York Times. But while he takes the denial of his claim by State Farm Fire & Casualty very personally, he insisted he is not acting purely out of self-interest.
Ive had my own experience, but a lot of people have had similar experiences, he told the Times. They have abused my people, my friends, the people I love.
To its credit, State Farm is not rising to the bait to bash their disgruntled policyholder. Indeed, Fraser Engerman, a representative for State Farm, told NUs Matt Brady they were taking it all in stride. Most of the government programs we participate in, including the National Flood Insurance Program, already have longstanding auditing procedures. We understand that is part of the process and we intend to cooperate fully with any additional inquiries that may come our way. (Click here for the full story.)
Still, Sen. Lott could be opening up a Pandoras box for insurers, with the resulting bad press destroying whats left of the industrys reputation for fairness.
The probe will undoubtedly draw hundreds if not thousands of unhappy insureds out of the woodwork, all complaining about the injustice of the industrys longstanding flood exclusion.
But the feds also are likely to spotlight many people with legitimate claims who still had a rough timepeople such as Carl Van, a professional claims trainer (and frequent speaker at NU-sponsored meetings), who had his own horror stories to tell when his home was hammered by Katrina. (Click here for Carl's story.)
What do you think the government will report on April 1, 2007, when investigators are required to reveal their findings to Congress?
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