The national media can be fickle. Hurricane Ike devastated Galveston and the Bolivar Peninsula. Those communities and people in them are suffering as much as those in Louisiana and Mississippi following Hurricane Katrina. Yet, I have seen little in the national media regarding this story.

The Houston Press ran an excellent article, Hurricane Ike’s Wake, detailing the effects of Hurricane Ike. It also questioned why there is so little national media attention to the devastation. Even the charitable contributions to Hurricane Ike relief efforts has been minuscule compared with Hurricane Ike.

Among friends, the lack of national attention concerning the Hurricane Ike recovery has been a topic of conversation. The explanations we have include:

• The election campaign and story of Obama and Palin were overwhelming.
• The collapse of the national economy had others thinking about their backyards rather than Hurricane Ike.
• Galveston and the Bolivar Peninsula are not Houston and not the size of New Orleans. Devastation to smaller communities gets overlooked.
• Images of rescue did not feed the media’s desire for sensationalism.

There was one comment of note to the Houston Press article—

“Now you tell us what happened, but the important thing is to tell us what we can do about it.”

Recovery lessons can be learned from Hurricanes Ike and Katrina so the impact of the devastation minimized. Federal, state and local governments with coastal areas should have emergency regulations in place and ready to be enacted expecting these types of rare occurrences. Building permitting has to be expedited. New National Flood Building Regulations have to be made much quicker so that those in the most severely devastated areas are not waiting months for permission to rebuild. FEMA has to be more practical regarding federal infrastructure regulations so that local officials can replace infrastructure with an eye to practical and much quicker repair. There needs to be exemptions from the National Flood Regulations which recognize historic areas, such as parts of Galveston, so we do not destroy the unique characteristics of communities with historical significance.

While, governments were much better prepared for Hurricane Ike than Hurricane Katrina, we can still do a better job. I am afraid that revised lessons are not going to be learned because the national attention is elsewhere. It is pretty certain that this song will remain the same the next time we arrive in a catastrophically damaged community.

Most people do not look at their insurance policy until loss or damage forces them to. And most will agree that trying to find confirmation of coverage is not as easy as expected. Typically, insurance policies are very long and the various coverage provisions and exclusions can be confusing and sometimes ambiguous.

This scenario became glaringly apparent in the aftermath of Hurricane Katrina. Many policyholders found themselves in a very uncertain world, trusting solely on their relationship with their insurance carrier only to be denied coverage based on an exclusion they had never heard of. And oftentimes worse, many policyholders did not receive many benefits under their policy because their insurance adjuster did not inform them of the coverages and benefits available to them. 

In an effort to prevent this unnecessary chaos in the future, several Mississippi lawmakers have recognized the importance of legislation to ensure that the citizens of Mississippi are aware of their rights as policyholders and informed of any exclusions in their policies that would be cause for denial of coverage. Unfortunately, these measures have not yet made their way to the Governor.

The Mississippi lawmakers started back in Session on January 6, 2009. We are in the process of preparing and pitching an Insurance Modernization Package to our lawmakers that will include, among other measures, a Policyholder Bill of Rights and other important legislation that will provide for timely payment of claims and penalties for noncompliance and unfair trade practices.

So far, this has proven to be an uphill battle in Mississippi, but one worthy of pursuing. The citizens of Mississippi are not insisting on anything that the insurance carriers are not already obligated to do in many other states across the nation.  

In the typical, hospitable Mississippi fashion, Mississippi has focused on the needs of their business guests first. As Mississipians rebuild their beautiful coast, they are acutely aware of the need for a fair and balanced co-existence with their insurer. It is now time to focus on the needs of the citizens of Mississippi.

Stay tuned….we are in for a promising year!

Deborah

A financially strong and profitable insurance industry is in everyone’s best interest. When insurance is profitable, companies sell more of their products, usually at more affordable rates. Consumers and insurers win. A tongue in cheek example of this is found in my line of work. Our firm wants insurance companies to sell as much of their product as they can. Affordable insurance with broad coverages sold to everyone gives insurance claims departments more opportunity to do what is in their short term economic interest—delay and deny payment of claims. (more…)

I met Ralph Nader in San Diego about a decade ago. He remarked that a major problem with Departments of Insurance is that most have a revolving door to and from the insurance companies they supposedly regulate. Nader implied that unless laws prevent insurance companies, their vendors and law firms from hiring those who supposedly regulate their activities, actual regulation that supports consumers will not exist. The practice of insurers hiring former employees of Departments of Insurance must stop in order to accomplish honest regulation without an appearance of a conflict of interest.

The revolving door is working for at least one employee of the Department of Insurance in Mississippi. Anita Lee, of the Sun Herald, recently reported that the deputy insurance commissioner who “oversaw” the Mississippi Insurance Department’s Market Conduct Study of State Farm following Hurricane Katrina has left the Mississippi Department of Insurance. Guess who hired him? The lawyers who represent State Farm in Hurricane Katrina matters.

Given this, you do not need to be a psychic to guess how well State Farm did in the Study. I noted the serious problems with the Mississippi Insurance Department study in a previous blog. In an article published in the Sun Herald, a noted consumer advocate wrote that State Farm could have written the report itself. Only legislation which prevents those regulated from hiring, directly or indirectly, those who recently regulated them can prevent this kind of conflict of interest.
 

A recent article in the Houston Chronicle noted support by some scientists to replace the Saffir-Simpson Hurricane Scale with other more accurate measures of hurricane destructiveness. It is about time.

I have long questioned the accuracy of Saffir-Simpson. I have seen structures in a high wind event, such as Hurricane Charley, with little or no damage. I have also represented a large multi-story condominium in Destin that’s roof was blown half-way off by Tropical Storm Dennis. The scale was not close to destruction prediction in either case.

The bottom line is that generalizing damage under a wind scale does not individually correlate to the actual destruction of buildings. The Saffir-Simpson Scale is, at best, an estimated prediction in a broadly general sense, rather than a bonafide measuring system of expected damage.

One recurrent problem in the insurance claims business is that insurance industry engineers use the Saffir-Simpson Scale to explain wind damage causation issues. As previously stated, my experience regarding how any one structure may withstand strong winds varies greatly. If the roof opened or bricks fell off a wall during a category one hurricane, engineers for the insurance company use the Saffir-Simpson to explain that it could not have been caused by the hurricane.

Another significant problem is one of safety. Bolivar Peninsula residents think Hurricane Ike was the storm of the century. Saffir-Simpson does not even rate Hurricane Ike a major storm. This shows how inaccurate a measuring devise Saffir-Simpson is. Ike should have been rated a Category 5 for Boilvar so people would know that it posed a catastrophic risk to them.

If there is going to be a discussion about a new measuring system for the destructiveness of a hurricane, my personal view is that one is greatly needed.

I spent the Thanksgiving Holiday in Key West. For those that have never been there, it is a unique part of Florida. You will not find prettier water anywhere in the United States, and the sunrises and sunsets are spectacular. Key West is the Southern most point of the United States and only 90 miles from Cuba. Everybody should visit Key West for a long weekend. Like Hawaii, many never go back to the mainland.

Key West has definite island atmosphere. One of my first large commercial cases in the 1980s involved a boiler explosion at the Key West power plant. My first deposition in that case showed that even the professionals respected the Key West lifestyle. Everybody, except me, wore shorts except the court reporter, who wore long sun dress. I felt very out of place in my three piece suit.

The issue in that case was whether the loss was caused by fire or steam. Since one insurance company covered the steam peril and another covered the fire peril, the issue was similar to hurricane wind or flood issues. Thank God the anti-concurrent causation clause had yet to be created because both insurance companies would have found a way to exclude coverage.

After Katrina, we represented a Florida Keys hotel that was damaged. I asked Donna DeVaney to handle the matter. When she went down with engineers and estimators to take photographs, there was a problem –the hotel was “adults only” and clothing was optional. Key West is very tolerant of non-traditional lifestyles. Not many American cities have a Fantasy Festival endorsed by the local Chamber of Commerce.

Key West and Galveston have a number of similarities. They were both struck by Hurricane Ike.  While Galveston took a direct blow and suffered storm surge, many areas of Key West were underwater. Key West has suffered massive destruction from hurricanes and is regularly in the path of hurricanes as they make their way into the Gulf of Mexico. Galveston is similarly situated.

Both are island cities with a very rich history. Key West was literally the end of the line for the railroad running the Eastern Seaboard of the United States. Galveston was the Port city for Texas until the Great Hurricane of 1900 wiped it out, and Houston took its place.

Throughout the holiday, my thoughts kept going back to the destruction Ike caused to Galveston and the Bolivar peninsula. Key West, like the Bolivar peninsula, has no seawall to protect it from storm surge. A direct hit by a strong hurricane will devastate Key West. Galveston fortunately has more protection. Most of the structures on Key West are not built high enough to withstand a major flood event.

In life, things are never the same; change is the one constant. At some point, another hurricane will scrape Key West from the map much the way Ike has destroyed the Bolivar peninsula. If so, it will never be the same. Whether the citizens of Key West protect their city by building a massive seawall like Galveston’s is questionable. I suggest you visit Key West sooner rather than later.

Posted by: William “Chip” Merlin

On Tuesday, we filed an amicus brief in the Corban v. USAA case. A copy of it is here for anyone to view.

This case is important because the Mississippi Supreme Court is going to rule on how anti-concurrent causation language is interpreted. Previously, only federal courts have made such rulings. Mississippi Court’s ruling is binding on federal courts and can overrule the Fifth Circuit’s poorly reasoned decisions in Broussard and Leonard. 

Judy Guice represents Dr. Corban. Judy is an excellent attorney and I have enjoyed her collegiality for the past several years. Her appellate brief is great and I look forward to seeing her argue this very important case. 

The only problem is that the Mississippi Supreme Court should have expedited this matter. Indeed, the Fifth Circuit should have sent these issues to the Supreme Court two years ago when Dick Scruggs requested it in the Leonard case. Since Hurricane Katrina three years ago, we have all been guessing at what the Mississippi Court will decide. It is about time Mississippi judges ruled on these matters.

Posted by: William “Chip” Merlin