Editorial: Do Some Not Have It So Tough In The Big Easy?

New reports from New Orleans send mixed signals. One can almost conclude that for some life is not so bad in the Big Easy. The gambling boats that are up and running again after Hurricane Katrina are doing a land-office business and more are planning to open in the Gulf Coast region as soon as possible. On the other hand, a groundbreaking trial began at Gulfport, Miss., on July 10 to determine if people whose homes were ravaged by Katrina can get payouts for losses that insurance companies say were caused by flooding.

It was reported in the St. Louis Post-Dispatch that one property owner was paid $1,600 toward his $130,000 in damages. As it turns out, the small payment was $500 less than what the family had paid in premiums that year. Stories vary, but it seems clear that the insurance-business water has been muddy for some. Policyholders think they have coverage and they don’t; at least that’s what their insurance companies are telling them. In other cases, policyholders say they have been misled.

It also seems clear that insurance is a business where Congress can and should step up to the plate and set federal standards, at least forcing companies to spell out in layman’s language (no small confusing print) exactly what policy holders are buying. We are not suggesting that the government dictate what coverage companies offer. We only say that what they offer should never be confusing to the policyholder.

One policyholder said he had wondered if he should get flood coverage but was told that he didn’t need it because he had hurricane coverage. He also said, however, that the agent didn’t want to sell flood insurance because he couldn’t make any money doing it. Now that policyholder is out of luck. From what we understand, some companies are refusing to pay damages because the water was not floodwater but a tidal surge (still water, right?). Others are not paying because they claim it was floodwater, not storm damage. (Duh!) The storm surge is produced by the winds, which force the water ashore. Already we reported one court decision that supported insurance companies that were rejecting claims. Apparently the victim’s insurance company said the water that destroyed his home was floodwater and not covered. The victim said he thought floodwater was from a river, not a tidal surge caused by a hurricane. It’s a confusing mess. Why not insure for water damage of any kind—rain, flood, or tidal wave, whatever? If it’s wet, it’s water. If it’s water, it’s covered. That would work.

As the insurance battle picks up momentum—there could be thousands of lawsuits, depending upon the outcome of the trial that started June 10—we still see, occasionally, views of hurricane destruction. We also see the views of people thronging to the casinos and hear the bandits going ka-ching!

History teaches that a percent of our populace is crooked, and we will never escape them. This bent to do wrong runs throughout society top to bottom. If Ken Lay of Enron fame were still with us, he could vouch for that. What this really means is that in that in the big, hurricane-ravaged area of the Gulf Coast we have good guys and bad guys, and the bad guys make us wonder why we even care. The good guys, if they are hurting, deserve our sympathy and help.

We know there are people hurting along the Gulf. And we suspect that most who are hurting are not busy fingering poker chips on gambling boats. And admittedly, the boats now working and those to come will provide jobs.

We have seen military performing at their best, saving thousands from disaster. We have seen governing bodies performing at their worst and, because of their poor performance, not enabling the recovery effort to be as good as it could be. The jury is still out on that performance.

We still don’t know what’s in store for that big fish bowl known as the Big Easy. Decision-making is crucial at this point, because the decisions will set the stage for how future, perhaps even greater, disasters are handled by the government. It has already been made clear that constructing hurricane protection that would withstand anything above a Category 3 storm is out of the question. They may not even be able to handle a Category 3. Time will tell.

The pendulum of the hurricane-season clock is swinging. Only times and places are yet to be revealed.

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