If insurers eventually knuckle under to political and legal pressure to pay flood-related Hurricane Katrina claims that they believe their policies excluded, what happens when they try to recoup some of that money by filing with their reinsurers? One attorney warns that carriers may in fact find themselves out of luck.
Our own Mark Ruquet filed a story about his potential problem last week. (Click here for the full story.)
If insurers are seen to simply give into political pressures or seen as not applying the best available methods of adjusting claims, then there is the potential for some [legal] dispute, said Vince Vitkowsky, with the New York office of Edwards Angell Palmer & Dodge, during a recent webinar. Indeed, he warned that if insurers succumb to the enormous social and political pressures to pay claims, they may find reinsurers unwilling to honor contracts.
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