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   GCN Special Report     Filed 2/28/06

Marooned By Katrina
A Renter's Story

Katrina’s Receding Waters Left Waveland Apartment Renter Sheila Floyd Far Away In Warrensburg, Missouri.  Like Coast Homeowners, She Was Blindsided By Insurance Policy Water Exclusions.

Part One

By Perry Hicks & Mark Proulx- Special to Gulf Coast News

“A lot of very smart people did not have flood insurance because they were told they didn’t need it.”  Mississippi Congressman Gene Taylor

Just as homeowners caught in the Freddie Kruger nightmare of insurance policy water exclusions, Sheila Floyd, 67, spends long empty days waiting for an insurance settlement that may never come.  She is currently residing with her oldest son near in Warrensburg, Missouri, approximately 45 miles southeast from Kansas City.

The car she was dependent upon for transportation was both flooded and crushed by a small tree and her furniture and belongings were completely submerged in Katrina’s inundation.  In order to resume self-sufficiency, Sheila needs to replace the car and acquire enough furniture to fill a new residence she can call her own. Her apartment in Waveland, MS., a small town on the Mississippi Coast, was ground zero for Hurricane Katrina.

In an email exchange with GCN, Sheila lamented, “I try to keep busy during the day, but there is only so much one can do to clean a 2 bed room apartment.  I am not in walking distance to town, and when I sit outside (when it's not to cold), I look towards the sky and pray. When I look into the mirror, I can see the effects Katrina took upon me. I sit and wait for good news, but it never comes. This is not living, only existing.

The good news she awaits would be a settlement on her $25 thousand dollar renter policy- money that could make her prayers for self-sufficiency a reality.

Alas, it is a settlement that may not be forthcoming.  Her insurance carrier, MetLife Auto & Home, has denied her claim for hurricane windstorm damage based upon the policy’s water exclusions.

In the mean time, Sheila struggles with this issue by spending hours doing research on the internet, sending out correspondence, and trying to contact officials by phone.  She cannot understand how the hurricane protection she thought she had purchased will not cover even the modest losses she has suffered from Hurricane Katrina.

Documents Sheila has provided to GCN bear witness to the determination this senior citizen has to collect on her policy.  Many pages contain highlighted dates and paragraphs and each page is organized alpha-numerically by notations in the lower left hand corner.

She has sought help by rendering appeals to both officials in Texas (where she initially evacuated,) Washington, and Jackson, Mississippi.  She even asked the same lawyers representing Senator Trent Lott and Congressman Gene Taylor, Scruggs Law Firm, if they would help her.

Just before Christmas she received a letter from the Scruggs Katrina Group declining her request based upon their “current acceptance criteria.”

Policy Confusion

At the heart of Sheila’s problem is language in two different sections of her clear-English policy.  On one hand, there is a hurricane windstorm deductible for which she was evidently paying.  The salient portion reads as transcribed below:

Hurricane Windstorm Deductible

B. 2. the following peril is added:

Hurricane Windstorm

We do not pay for loss to the interior of a building or to personal property inside, caused by rain, sand, dust, or debris unless the hurricane windstorm first damages the roof or walls and the hurricane windstorm forces rain, sand, dust or debris through the opening. 

C. Definition. As used in this endorsement “hurricane windstorm” means a

 windstorm and accompanying winds along its path identified and recorded as a

 hurricane by the National Hurricane Center or any agency responsible for identifying

 and recording hurricanes.

All other provisions of this policy apply except as modified by this endorsement.

On the other hand, MetLife, in the letter of denial to Floyd October 6, 2005, specifically called out the provisions of Section I of her policy extracted below:


  1. We do not insure under any Section I coverage for any loss which would not have

      happened in the absence of one or more of the following excluded events.  We do

      not insure for any such loss regardless of:

(a)     the cause of the excluded event

(b)     other causes of the loss; or

(c)     whether such causes acted at the same time or in any other sequence with the excluded event to produce or contribute to the loss.

             These exclusions apply whether or not the excluded event results in widespread

             damage or affects a substantial area.  The excluded events are listed below.

     D. Water damage, meaning any loss caused by, resulting from, contributed to or

          aggravated by:

1.       flood, surface water, waves, tidal water or overflow of any body of water, or

      spray from any of these, whether or not driven by wind;

The Regulatory Side of the Equation

Who permitted such ambiguity into insurance policies?

“We did,” answered Mississippi Insurance Commissioner, George Dale in a phone interview with GCN.


“It is the same language used in all the states around us,” said Dale, a fact later confirmed by Scruggs Law firm attorney, Zachary Scruggs. 

While the concept of flood exclusions and the role of the Federal Flood Insurance Program are easily understood, having a policy that both sets out hurricane windstorm protection and exclusionary events occurring at the same time or in any other sequence, are simply unfathomable.

Sheila Floyd has argued to GCN that both the roof and windows to her apartment had been breeched by Katrina’s 120 mph plus winds.  Thus, her first floor unit suffered damage well ahead of the devastating storm surge.  However, according to her policy’s exclusionary clause, it would not matter even if wind had utterly destroyed the entire building.  Once spray from the advancing storm surge had reached the former building’s foundation, all hope for settlement would seem to have been literally- if you will excuse the analogy- blown away.

And owing to the mechanics of hurricanes, spray reaching wind damaged structures is almost a surety.  Wind-driven water is simply a hallmark of hurricanes.

George Dale, who has been all but vilified in some quarters of the press, makes an important differentiation saying, “It is a matter of probable causation- a percentage of the storm damage has to have come from wind and wind damage has got to be paid.”

And, according to Dale, as of February 23rd, $5.6 billion has been paid out by insurance companies for Hurricane Katrina.

Dale was quick to respond to GCN’s inquiries with a mixture of well organized facts and quite believably sincere comments.  For example, when detailed about Sheila Floyd’s plight, he quite candidly (but erroneously) asked if this was the woman “who said she wanted to kill herself?”

Dale also confesses that in just the first two months after Katrina, his office had gotten as many requests for assistance as had been in all of the prior calendar year.  The staff is virtually awash in paperwork.

“I read these letters and my heart goes out to these people.  I wish there was more I could do for them,” Dale said, his voice lowering a note in sincerity. 

Then, in another remark Dale reinforced his earlier assertion by telling GCN, “They (insurance companies) have to pay on wind.  The question is just a matter of percent.”

When asked what did he think the insurance companies would do if he simply came down on them hard; if they didn’t get what that wanted; would the insurance companies simply pull out?

“It depends on what you mean pull out.  If that means leaving the state, no, they wouldn’t because it is too hard to get back in.  If you mean not write insurance, yes, that is likely what they would do,” Dale admitted, “My job is to try to get as many claims paid as possible as well as see to it that Mississippians can continue to buy insurance.”

Without a doubt, accomplishing this task would be a thankless job for which Dale has so far gotten no thanks.  As he noted more than once to GCN, “Every industrialized country in the world relies on insurance;” meaning Mississippi could not afford an insurance availability crisis.

It is not hard to imagine what would have happened had Dale driven up the cost of insurance by demanding carriers cover all hurricane damage regardless of peril.

Homeowners and prospective homeowners (read voters) would have been up in arms at the expense or unavailability of insurance. And until Katrina, no one would have believed a storm like Katrina possible.

After all, what is the worst thing could have happened?  Camille?

In Part Two, we will take a look at the legal terrain over which pending court battles are being fought.

Part II   Part III

About the Author.....

Perry Hicks is the senior writer for GCN. He is a former Mississippi Coast resident and was a correspondent for the old Gulfport Star Journal. He has appeared on Fox News Channel. Perry has also hosted his own radio talk show on the auto industry with a mix of politics. Perry is a former college professor and a frequent contributor to GCN writing on stories of national importance with local interests. His articles can be found in the GCN Archive.

Contact the Author: arielsquarefour@hotmail.com


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