What Part of a Contract Do People Not Understand?
 

It's official. Trent Lott is an idiot.

Well, idiot is too nice of a word, and kind of let's him of the hook. The word might imply that this is not his fault, which it is--completely. He is acting with malice and intent. This seems to me to be a case of "I am so important, that I can re-write the law to suit me after the fact". Anyone in bed with scum like Scruggs should be hung, publicly.

http://www.chron.com/disp/story.mpl/special/05/katrina/3531239.html

This is really simple:

If you live in an area that is susceptible to storm surge/floods--any occurance of water from a body of water touching your house--than you MUST buy flood insurance. Are people idiots? Surely Trent Lott is smart enough to read his policy and rich enough to buy appropriate coverage.

If you redefine the coverage of an insurance policy after the fact, you destroy the entire concept of insuring against risks. If non-flood insurance covered floods, then the rates would be higher and the insurance companies would have re-insured against that risk.

These lawsuits could make the whole system break down. What idiots. It's not like insurance companies exist in a vacuum.

I agree. If you live in a flood prone area, you should have flood insurance. No flood insurance=tough luck. Lott is way wrong here.

There is another important issue here, though. It's very likely that many of the people in the area had no idea they weren't covered.

Have you ever read your homeowners policy? What a pain in the ass. There ought to be some regulations that the policy's coverage be described in plain low-reading-level english in two pages or less. It should also be a requirement that any exclusions are highlighted. So many policies are written as to what they DO cover, as opposed to what they DON'T. This should be turned around and the insurance company should have to tell you of any likely risks that aren't covered. And I can't imagine a more likely risk than flood for property at low elevations in a flood zone.

I for one am getting tired of rebuilding people's houses who live in hurricane areas and file a claim ever 2-3 years. They need to get insurance to cover it and if its not available then they pay the whole thing, and not ask for state/govt help.

I would love to live on a beach. I cannot afford it, so do not. They do not share this idea and need to face reality.

JoeA

I guess the fight is over wind damage as opposed to flood damage. The article is not clear on what specifically is being rejected.

Also, if you want flood insurance you have to be pretty darn clear when getting it. No standard insurance coverage is going to protect you.

They are written that way so that they can't be parsed by lawyers to mean something different than what is intended. Also, the language is inclusive because some new risk could come out of nowhere (or, more likely, be invented by trial lawyer) that would turn every insurance policy into a lottery ticket. That's exactly what happened with the mold scare a few years ago.

As far as not knowing that your homeowners insurance doesn't cover flood damage, there are two likely causes for this:

1) You are an idiot.

2) Your agent misled you. Agents, like car saleman, sometimes stretch the truth to make a sale. Using this same analogy, this is like suing GM because your salesperson at the dealeship told you that your Geo Metro could do 0-60 in 8 seconds. GM never claimed that--and has made repeated statements to the contrary.

Sounds like a reasonablee argument. You have to consider that the insurance companies have more money then god for legal advise when writing insurance policies. When is the last time anyone managed to get an insurance agent to redraft the language of their policy. I will not happen. If the insurance company wanted to specifically include "wind-driven storm surge" it should have included the specifica language in the policy. It did not. It should pay.

If this statement was taken to heart by defense counsel for insurance companies, the world would be a better place.

I don't have an agent. It's up to me to read my policy and ask for riders on anything I want extra. My homeowners insurance carrier (Amica) is more than happy to insure almost anything I come up with. Surprisingly the fee is usually very low. Which makes it even more important to know all of those exclusions so you can buy what you need.

So here's a question: Since the insurance company will only tell you what their policy DOES cover, how are you supposed to know what you're missing (like flood, or mold)? Is there some grand homeowners insurance boilerplate to compare with?

Wow PBS, that's pretty ignorant.

1) Insurance companies have "a lot of money" (i.e. reserves) because they are required by law to do so.

2) Most agents are contractors, not employees. They have no power to change the agreement between insureds and insurers.

3) Flood damage, in any form, is specifically listed as an exclusion on every homeowners policy sold by every insurer in this country. This includes "wind-driven storm surge".

What Scruggs is trying to do is make himself richer. Nothing more.

Imagine if you sold a car to someone. You draw up a bill of sale, you get a check, you sign the title over. By your logic, the seller could sue you for your house, because that wasn't specifically excluded from the bill of sale on the car. IT IS EXACTLY THE SAME THING.

The more I think about this, the more I think the plaintiffs may have a case.

Once again--understanding that the insurance companies have all the lawyers and all the expertise in crafting and wording a policy to maximize their profits and minimize their risk, where's the consumer protection? Should every homeowner have to hire a "buyer's agent" insurance lawyer to parse the fine print?

Flood insurance may be obvious--even to an idiot. But what if the insured literally can't understand the document? (we are talking about MS, LA and AL here) I can imagine a local court not taking too kindly to clever policy wording that is beyond the understanding of the customer.

People have fire insurance. Why not just burn your house down?

If it's not covered, then it is missing, right?

I don't have the policy in front of me, but based on the article it sounds reasoanble. But, as an attorney who reads and interprets contractual rights for a living, I think I know what I'm talking about. So do my clients for whom I recovered over 10m this last year.

It's been happening in New Orleans.

And it is fraud.

I always find it curious how morality seems to go completely out the window when it comes to insurance.

Right. So it's up to me--a non-expert--to try imagine out of thin air anything that can go wrong vs a well-lawyered company with expertise in this very area?

OK, OK, just kiddin. :)

This is why our country is going down the tubes. Lack of personal accountability. It is NOT the insurance company's job to hold your hand and tell you what insurance to get. It is their job to provide insurance for you to buy. It is your responsiblity to be an informed consumer and buy what you need. Everyone wants to run to a lawyer and "stick it to the man" when they screw up. Not having flood insurance, coffee that's too hot, whatever... The civil courts are not meant to be lottery tickets people.

If you think Lott has a case, then perhaps you also think that you could sue Porsche for the cost of your 911 because the car salesman didn't specifically tell you that a 911 is NOT an amphibious vehicle...

Rick, I completely agree RE: personal accountability. Personally, I think a good business/businessman informs his customers. When I managed a custom media sales department for an IT magazine, half of our pitch was education, "this is what you need and why."

A good insurance person would/should upsell a flood policy.

Did they pay the last time a hurricane wiped out this region? Or the time before that?

"Wind driven storm surge" sounds like a fancy term for "flood" to me.

The reason the insurance forms can be archaic - is that they have been "tested" by courts and precedent. To create new definitions for the same old thing is to enter Wonderland with Alice as your underwriter.

Dont worry taxpayers - as insurance companies get hosed over this (even in legal fees) and pull out of this market - the Feds are sure to step in and subsidize the region..

So you are a plaintiff's attorney?

That explains a lot.

Thank you for making the price of every product I buy more expensive so that you can fight for "consumer rights" (i.e. line your pockets). Thank you for making my health insurance rates quadruple in the five years I've been working. Thank you for making sure that everything I do has a form, a procedure, and a waiver because of lawsuit fears. Thank you for making every product I buy come with dozens fancy little warning stickers to tell me things I couldn't figure out like I shouldn't try to change the blade on my lawnmower while it is running. Thank you for convincing the general populace that even the most minor of injuries is grounds for a lawsuit and a windfall settlement (minus a 30% fee, of course). Thank you for letting the public know that tobacco companies, carmakers, and insurance companies are only in business to kill, mislead, and make lots of money (wow, lawyers would never do these things) and don't actually provide any goods or services that help society to function.

This is the third draft of this post. It is very restrained compared to the earlier drafts.

If State Farm is required to pay, they should start charging prison-rape prices for any properties in hurricane-prone areas. I've heard South Florida insurance prices are skyrocketing. In one instance, the insurance premium went from $4000 four years ago to $8500 today with assurances of an increase to $10-12k in the future. Insurance companies refuse to lose money. It is against their religion. :)

Go legion!!

Agreed. This is the real solution, not deceptive policy wording.

Your misinformed rant is very easily turned around. . .
I am sure that you would never suggest anyone who is maimed, killed, cheated, or defrauded should seek compensation. Your right, companies like ELRON should never have to pay for their wrongs, Ford should never have to pay for knowingly place into the stream of commerce a lifethreatening vehicle.

You mean Enron?? Who is ELRON?? Some evil all knowing alien who maims people for a living? All hail ELRON!!

As an attorney, you really should learn to type better...

ELRON. You know, Elron Hubbard. :D Suing the Church of Scientology--now there's a noble calling for an attorney. :D

There was an Elroy on the Jetsons...cute little kid. Never knew he grew up to be an evil maiming alien...

This thread caused me to pull out my house insurance policy. Sure enough, in black and white: They don't cover flood damage. Wind damage is covered. I have Geico (so I can't speak for all of the others), and the policy is pretty clear on this one point.

Frankly, unless he can show that the damage (or at least a large part of it) is due to wind alone, he has no chance.

Its true that some insurance companies do not willingly pay out when they are obligated, that is pretty lousy. Somehow I doubt that his insurance is on the hook for much of this loss. Besides, I thought Bush made it a point of saying he would rebuild his house. Trent's got no worries.

I dictate. My secretary types. I don't need to know how to type. I'm not a typist nor do I ever intend to become one. I guess the old saying is correct - when you can't attack the argument attack the person making the argument.

Extremely sloppy language for an attorney -- and I'm so poor with my language skills that I rarely see other's errors!

I also do not think that Legion is suggesting that there is never a case for a lawsuit. There are plenty of circumstances where people are grossly negligent and deserve to be sued. At the same time, with my wife in law school right now, I (and she) are developing an even greater disdain for the disgusting and idiotic suits some lawyers are willing to bring. The suits are clearly not intent on "making victims whole," but are brought by greedy lawyers whose only motive is to line their own pockets.

This case sound like one of those.

Remember, pbs, that to some folks, "freedom" means businesses being free from taxes, free to exploit, not required to clean up their messes, not liable to working men and women, not liable to customers, etc.

See, that's your problem. I suspect you imagine that it's about people. People are not ends in themselves. They are only a means to a further end......earnings.

Kudos to PBS on a post with correct spelling!! I was looking at the keyboard and the N and L aren't even close so that leads me to think you really thought the company was named ELRON...

All Hail ELRON!!

Supe-- Give it a rest man, seriously. No one here is saying that people should be prohibited from suing a company. There are plenty of cases that should be litigated. The problem is that the lawyers in this country have taken a once proud profession and turned it into what we see during the commercial breaks of the Jerry Springer show. Too many lawyers and not enough real lawsuits to go around so they invent some. Problem is that everyone pays for the frivolous lawsuits. Hence the current medical malpractice insurance crisis across the country.

It's only a matter of time before the gubmint will step in and regulate lawyers the way they regulated physicians with HMOs. The lawyers made their beds, now they get to lay in them.

Let me explain insurance here, as there seems to be a lot of misconceptions.

Insurance protects certain things against certain risks. The things protected, and the risk protected against are defined in the policy. Think of insurance like a shield. A shield may be useful against arrows, but not a howitzer.

In order for insurance to work, both the things protected and the things protected from must be defined. Essentially, you take all of the things protected and calculate the cost of fixing them. Let's say you protect 100 things and they cost $1 each to fix. Then you multiply this times the likelyhood of fixing the things protected. Let's say that 20% of the things protected are likely to need fixing. This means that $20 must be collected to cover the expected repairs for the group. You divide this figure by the number of things protected, and each thing will cost $2 to protect.

If you introduce a new risk, you have broken the formula. Let's say someone comes in and says that now you must protect against things being lost, not just broken. You expect that for every 100 things protected, 30% will be lost. You now need to collect $5 for every thing protected. But wait, you are being told to protect things that have already been lost, and you cannot collect additional money to cover them...

The government is made up of lawyers, so don't hold your breath waiting for that one!

Good point...

BTW, I actually was open to consider voting for the Democratic ticket last election till I saw who the VP candidate was. With Edwards as VP no tort reform would EVER occur.

One can only hope, but they contribute so much money to the Democratic Party (and they are most of the politicians from that party). They will never let that happen. Every time some sort of law is proposed at the state level, the bar association runs doom and gloom adds about how this will cause the loss of all recourse when the little guy is trampled on, how this is the end of personal freedom, etc...

Assuming makes you an @ss, and so do your posts. Trying to discuss anything with someone who bases the merits on spelling and grammer is futile. End of discussion.

Exactly. How many former trial lawyers are currently in the senate? It only takes one to filibuster...

What makes this lawsuit even more shocking is that Trent Lott is/was a hard core right wing Republican. I guess that, corrollary to the old saying that a Republican is a Democrat who's been mugged, a plaintiff can be a former anti-trial lawyer Republican who's been tort(ed). ;)