GCN Guest Opinion
Katrina Survivors - Pulled Through Knot-Holes
by Robert J. 'Bob' Burke - BHS Class of 1965
As editor of a post-Katrina BHS e-mail Journal covering experiences of several hundred of my classmates who are Biloxi High School alumni, I have seen an alarming trend. Our post-Katrina journal has posted dozens of messages and links to news accounts of the problems people on the Mississippi Gulf Coast have been having with their insurance companies. Practically every mention was in a negative light - they were mostly heart-wrenching stories.
[Note: I am not making up this stuff, just reporting what people are saying. I have a complete searchable history of all the e-mail and all journal entries. There are now over two hundred editions since August 29th and more than three hundred pages of text.. I took the time to research this by searching the journal.]
There might be some real relief "right around the corner" as a result of some pending litigation [see recent news articles regarding the Richard Scruggs lawsuit]. That relief will not likely occur very soon, in my experience it takes years to resolve. However, the people's suffering is real and is happening right now. People who tell me that they are being screwed by insurance companies and sign those messages are getting heard. I'd love to see some e-mail messages saying all is well and we were fairly treated and now we are rebuilding... So far that hasn’t happened.
Many of us believe that it is the responsibility of government and relief agencies to step in and provide temporary, interim solutions - especially funding relocation and living expenses while the details of final insurance settlements are being worked out and while home construction is underway. It is however, more than a little disgusting to hear that tiny amounts are being offered by insurance providers when the actual losses are obviously huge. If you don't live on the Mississippi Gulf Coast to see the extent of the losses, one just has to review the photos of the area to get a good impression how devastating this storm was …
In our post-Katrina BHS e-mail Journal, we have been lately focused at the moment on SBA-managed low interest disaster loans. I have my own experience with SBA-managed low interest disaster loans, so I know whereof I speak on that subject. It is further disturbing when the full amounts authorized under the law - as in the case of FEMA and SBA administered Disaster Loans - are somehow ‘not available’ to people who are trying to rebuild. Not enough has been written in the press on this. Only recently is it getting attention.
There are people in Biloxi who are being 'pulled through knot-holes' and for all practical purposes being tortured mentally over massive 'insured' losses. This isn't like losing your wristwatch and sunglasses over the side of the boat; these are deeply personal losses with significant emotional impact. There are people who have *nothing* left of their homes and material possessions. The condition of someone having *nothing at all* is hard to comprehend ... but it is nonetheless something a fair insurance settlement can help begin to heal. As it appears from many reports I have received, that insurance companies are pouring salt on the victims' wounds.
Yes, there is definitely an "us vs. them" thing going on here. It happens after every major disaster, as far as I have seen, the insurance companies want to pay the least amount possible for claims. The victims want to be paid the maximum they are entitled to. But there's a twist here. Unfortunately insurance companies (the payers) are also the ones who determine what level of payment the claimants are entitled to (they are also the arbiters of loss and entitlement). This produces a valid concern that the "fox is watching the hen house" ... Where is the independent appraisal of loss and entitlement?
I find it hard to believe that people are asking too much to have their insurance companies stand up and pay a fair settlement for their loss - one that is more than a pittance. I have seen far too many reports where insurance settlements were in the hundreds of dollars and others where settlements would barely cover a fraction of their former home contents, much less cover the reconstruction of the dwelling. There is definitely a pattern of behavior on the part of insurers that is disturbing.
These victims (the claimants) are the people who are sleeping in tents, living out of minuscule sized travel trailers, in someone else's home or in those few shelters that remain open. These are the people who find themselves months later still trying to grasp that where their homes once stood, are now standing pools of mud, water, rubble and debris - or just a flat piece of land or a bare concrete slab. Shattered lives are strewn across the whole landscape like bits of litter. These people have suffered losses and their suffering is palpable at great distances from the Gulf Coast (even as far away as I am, living almost at the center of the US). As I am monitoring news reports and messages from hundreds of people, I have come to see that even the insured are once again victims.
I understand that businesses have to make money, but the insurance business is, after all, a risk management business. They are supposed to be the world's leading experts in risk management. It appears to me they are shifting the burden to the policy holders …
I know a few things that ordinary folk do not usually know. For example, is it such a big secret that there are huge re-insurers (like Marsh McLennan in the US and numerous Swiss re-insurance companies, such as Swiss Re) that provide backup coverage for the insurance companies themselves. The front line insurance companies (like State Farm, and others) behave as if this is going to be the end of the world for their companies ... if they make the payments that they signed up for. When in reality these insurance companies themselves have insurance for exactly these types of events with re-insurers ... Will these [front-line] companies not expect the re-insurers to pay their claims? Both types of insurers are expected to deliver on the promises made to their insured. So far it appears that is not happening.
On the other hand, it may very well be the 'end of the world' for the many thousands of people, many of whom are getting insufficient insurance settlements and offers of settlement. They have no homes, no possessions, no cars, no boats, no anything ... and no money to start replacing and rebuilding. No wonder they are angry and depressed.
Thank you, and Kind regards,
Robert J. 'Bob' Burke
BHS Class of 1965
About the Author:
"Bob Burke is a former Biloxi resident
who lives in the Dallas-Ft.Worth metro area. He is a computer consultant
who travels extensively on business both internationally and throughout
the US. Since 2000, he has been a volunteer who manages an e-mail
distribution for more than 200 of his BHS 1965 classmates and helps other
volunteers from his class maintain reunion contact information for BHS
class of 1965 alumni.