( Sign seen in Lakeview neighborhood of NOLA, August 2006: Photo scout)
“Allstate SUCKS” just does not do justice to describing what the company has done in handling Katrina claims. I’m thinking more like— Allstate: Criminally Fraudlant Bastards. But they have Sucked up YOUR tax dollars. From the Times Picayune…
If Allstate attributed the damage to wind or rain, for
example — putting it on the hook for payment under the
customer’s homeowner policy — the company priced the
cost of removing and replacing the drywall at 76 cents per
square foot. But if the damage was blamed on storm surge or
flooding, the estimated cost of removing and replacing the
drywall more than quadrupled, to $3.31 per square foot.
A key difference between flood Sheetrock and wind
Sheetrock is this: Allstate must pay for damage covered by
its homeowner policy. But damage blamed on flooding is
covered by the National Flood Insurance program, set up by
the federal government and subsidized by taxpayers. And who
decides which policy covers which damages? As with 96
percent of flood policies these days, it is the private
insurer, in this case Allstate.
It wasn’t just drywall either.They did likewise with carpeting and painting. And it doesn’t end there…
More disturbing still was the experience of Allstate
customers Robert and Merryl Weiss, a Slidell couple who
eventually took Allstate to court. As part of their flood
insurance claim, Merryl Weiss drew up a handwritten list of
damaged household contents, mostly fishing equipment. Her
claim came to $38,848.35.
During depositions taken in connection with the
litigation, they discovered that on the contents list
submitted by Allstate for payment under the Weisses’
flood policy, the value of the loss billed to the federal
program had soared to more than $139,000. Fishing gear was
nowhere on the list, but things had been added that the
Weisses didn’t even own, including furs, jewelry and
“When Allstate pays a claim under a flood policy,
they are using the checkbook of the United States Treasury.
When they pay a claim under their homeowners policy, they
are using the Allstate checkbook. For every dollar paid out
of the federal treasury under flood, Allstate takes a credit
and keeps a dollar. Essentially Allstate is profiting at the
expense of the American taxpayer,” Weiss attorney John
Also noteworthy is that Allstate was not
backed up by reinsurance…
Reinsurance paid for an estimated 45 percent of U.S.
losses incurred by insurers as a result of the 2005 storms,
according to the Insurance Information Institute, but
Allstate was on the hook for the entire cost of damages
covered by its Louisiana customers’ homeowner policies.
By the end of 2006, it had paid $1.4 billion in homeowners
claims in Louisiana, where it is, after State Farm, the
state’s second-largest residential insurer.
(added: Also noteworthy–“Despite its short-term loss in 2005, the Northbrook, Ill.-based
insurer has been on a torrid profit streak and nearly tripled its net income to
$5 billion last year on record revenue of $35.8 billion.”)
Finally in the wake of Katrina the federal flood insurance program put out a memo to expedite the processing of claims “and instructed the insurance companies to pay
the flood policy limits if the home was washed off of its
foundation or if the home was in “standing water”
for “an extended period of time.” However…
In hindsight, others have begun to wonder if it
didn’t send a signal to the private insurance industry
that the federal treasury was their cookie jar and that no
one would be looking if insurers helped themselves at the
Bob Hunter former head of the flood insurance program under Carter and Ford said the memo “was a very bad idea” as…
“It allowed these insurance companies to come in and
say, ‘This was all flood damage,’ and hand out a
check without any analysis of whether it was wind
The dual price lists are something else again. “I
had no idea they would be so blatant,” Hunter said.(all emphasis mine)
Allstate has been subpoenaed by a federal grand jury and the Department of Homeland Security, both investigating the insurance industry’s handling of Katrina claims.
Added: NOLA bloggers on Allstate:
Wet Bank Guide
da po’ blog
Michael Homan–checked his files and found–“To remove our plaster walls and lath, Allstate charged $8.34 per square yard with flood, and $3.05 for wind.