Insurers have taken a beating in Congress and the press for allegedly dumping claims involving properties damaged in Hurricane Katrina on the National Flood Insurance Program, which in fact might have been wind-related and should have been paid by private homeowners carriers. While two federal investigations failed to come up with any evidence supporting such charges, one insurer testifying on Capitol Hill offered a solution that might make the point moot in future storms. I am curious what you make of it.

Indeed, as reported by our own Matt Brady (click here for the full story), Fidelity National Insurance Company President and CEO Mark Davey said his company cannot possibly be pegged with what Rep. Gene Taylor, R-Miss., has characterized as a natural conflict of interest in having a homeowners insurer that also writes for the NFIP send an adjuster to assess wind and water claims on the same property.

Under such circumstances, it has been suggested, an adjuster loyal to their employer–the insurer–might be tempted or even coerced to skew their report to indicate that flood waters were entirely responsible for a loss, no matter what evidence of wind damage might be evident, thereby sticking Uncle Sam with the entire bill.