Ah, lawsuits. Nothing beats suing the pants off of a big, greedy company to make all right with the world.
Now Brian Williams probably doesn't really believe that, so why did he ignore the obvious downsides to massive punitive damages in Hurricane Katrina court claims?
Read my story here.
NBC’s Brian Williams quickly breezed through news of a court ruling in Mississippi pertaining to Hurricane Katrina insurance claims. But unlike coverage of the case in the Associated Press and The New York Times, the “Nightly News” anchor cast the ruling only as a victory for storm damage victims, without looking at how it could harm the insurance industry or gum up courts by encouraging lawsuits.
Williams told viewers of the January 11 program about “A big legal victory today for a Biloxi, Miss., couple who sued State Farm Insurance for refusing to pay” their Hurricane Katrina damage claim. The ruling could prove helpful to “hundreds of other victims in that region” who could “benefit as a result,” the anchor insisted. All told, Norman and Genevieve Broussard walked out of court with nearly $3 million, Williams added.
But Williams failed to tell viewers that most of that award was $2.5 million in punitive damages, or that the Broussards “wanted State Farm to pay for the full insured value of their home plus $5 million in punitive damages,” as Garry Mitchell of the Associated Press reported on January 11 (a story which appeared in The Washington Post the following day).
Even pared in half from their initial request, the punitive damages award would be “distressing” for insurers, economist Robert Hartwig of the Insurance Information Institute (III) told Mitchell. “It adds even more cost and more uncertainty to the other problems that already exist in the Mississippi homeowners insurance market,” said Hartwig.
What’s more, the “jury decision could also lead policyholders to conclude that instead of settling” out of court that “they should hold out in the hope that a jury would award them millions of dollars in punitive damages,” New York Times reporter Joseph Treaster wrote in the January 12 paper, citing Philadelphia
attorney Randy Maniloff.
—Ken Shepherd is Managing Editor of NewsBusters
Editor at Large
Comments Policy
I say stick it to the bastard
January 12, 2007 - 17:18 ET by RackieI say stick it to the bastards. State Farm was on the hook for two hundred and something thousand for a house that disappeared off the foundation. They were arguing it was water and not the wind cause they don't cover water damage and so they took a chance in court which they must have figured they had a better than a fifty-fifty chance to get out of paying the claim. So how do you tell the diff in a hurricane between wind and water when the house is gone?
State Farm has a history of screwing their policy holders. I'm sure they will appeal the verdict in the hopes wearing down these claimants and discouraging others. Time is on the side with the most lawyers.
They shouldn't have written t
January 12, 2007 - 17:24 ET by Andrew H.They shouldn't have written the insurance for an area below sea level. Yes, they should have paid up--the wind caused the water to come. How stupid decisions are made at the highest levels sometimes is beyond me. Must be democrats.
Liberalism is a convenient lie.
Hey Rackie, don't all the I
January 12, 2007 - 17:25 ET by MightyMouthHey Rackie, don't all the Insurance companies try to wiggle out if there is a chance they can? Reason I ask is, I have state farm insurance!
"There are two types of people in this country; those who provide freedom and those who enjoy it." MM says...
http://www.jdpower.com/financ
January 12, 2007 - 20:45 ET by Rackiehttp://www.jdpower.com/finance/ratings/homeowners_insurance/index.asp
see how State Farm rates with these guys
Talk about burying the lead .
January 12, 2007 - 17:45 ET by jdhawkTalk about burying the lead . . .
This is about a plaintiff attempting to sue an insurance company for flood damage to their home when the plaintiff refused to ensure their home with flood insurance. Something that they were surely warned about when they took out insurance on their home in order obtain a loan from their mortgage company (all home and business insurance documents state clearly and in bold type that the policy doesn't cover flood insurance).
Flood insurance is generally not expensive because the insurance companies don't actually offer the insurance but administer it for the government. Flood insurance is a federal government run program because no insurance company would cover this type of insurance.
The plaintiff clearly has no case. To say that they do, indeed creates an untenable situation for the insurance companies offering insurance in that region.
The answer by the insurance companies will be to simply stop providing insurance to that region altogether. So, regardless what you may think about State Farm or the insurance company of your choice. What this means to you if you have a home or business in this region is you will not be able to insure it. Of course, if you can pay cash for said home or business this isn't a problem. If that is not the case, then you will not be able to purchase a home or business through a mortgage company because mortgage companies will not give you a loan until their loan is covered by insurance.
Still want to play stick it to the insurance companies?
Meanwhile, the plaintiffs didn't go home with squat. In our country (so far at least), each side may appeal. Certainly, the insurance company will do that. Until all legal remedies have been exhausted by both parties, no money will change hands.
Then it must be appealed--the
January 12, 2007 - 17:48 ET by Andrew H.Then it must be appealed--the judge made up something (like many do)--
Liberalism is a convenient lie.
No money will change hands bu
January 12, 2007 - 18:15 ET by Dan The Man 2No money will change hands but there is the possibility of settlement. Is it better to have 200K in hand now or 3 mil in 20 years?
Nuke em til they glow then shoot em in the dark. -- save my gun, shoot a liberal.
I'm as conservative and capit
January 12, 2007 - 20:19 ET by cunservatyveI'm as conservative and capitalistic as the next non-liberal guy, but I side against the insurance companies on this one. You see, I'm here in South MS and endured Katrina. We had no juice for 9 days, but our house came out okay; my insurance company paid for my groceries (I'm a renter and have renter's insurance).
Folks just south of us didn't fair as lucky. I saw homes that were destroyed many miles inland from the coast (presumably by tornados). Both elected Democrats and Republicans here lost homes and are not getting any insurance pay-outs (i.e., Trent Lott and Gene Taylor), because the insurance companies are claiming that everyone lost their homes solely to storm surge with no wind damage at all. Well, a tornado that can destroy a home inland can also destroy a home on the coast too, and only the insurance adjusters get to decide how much damage was caused by wind versus surge.
What's going on in South MS and LA is a travesty. Insurance agents are insurance agents...and rattlesnakes are rattlesnakes.
Cunservatyve military medical guy
If you rob Peter to pay Paul, you can always count on Paul's vote!
Since Katrina, FEMA has mappe
January 13, 2007 - 01:58 ET by jdhawkSince Katrina, FEMA has mapped all areas along our coast that could sustain flood damage. I have a rental that is 125 miles inland from the coast of North Carolina. Because it sits overlooking a lake, it is considered in a flood zone. I was sent a letter 2 years ago by my mortgage company that I either found flood insurance on my own or they would find it for me at rather unfavorable rates. I paid up.
Even though I think that there is not the remotest chance that my condo would be flooded, if it should happen the insurance company would pay up. Hey, it is not their money anyway. It is all of us taxpayers that would foot the bill, since it is run by the federal government.
The above should have been inacted long ago all along our coast. Had, it been enacted, tens of thousands of home owners along our eastern and southern coasts would have been spared bankruptcy and homelessness because they didn't bother to or refuse to pay for flood insurance to protect their most expensive asset - their home.