Insurance Companies Continue to Screw Katrina Victims

Victims of Hurricane Katrina have been screwed so many times. First it was by the local government, then by the federal government, and finally by insurance companies that have been weaseling out of their obligations to policyholders from the start. Yesterday, insult was added to injury when the Fifth Circuit Court of Appeals ruled that insurance companies, including some of the big dogs like Allstate and Travelers, don’t have to pay for losses caused by flooding. The policies only cover wind and rain damage.

The shady dealings are sort of fuzzy. Apparently, many of the homeowners were assured that their policies provided full hurricane coverage. Also, some of the houses and businesses were destroyed by wind and rain hours before waters breached the levies and flooded New Orleans. Katrina victims may still have a chance for mercy. The case will head to the Louisiana Supreme Court next, and there are several similar civil suits waiting in the wings.

—Celia Perry