Allstate Insurance only wants its good hands on your wallet.
State Farm isn’t such a good neighbor, after all—especially in your time of greatest need.
Farmers has seen a thing or two and has learned a thing or two—about low-balling claims.
Nationwide isn’t on anyone’s side, no matter what Peyton Manning says.
And lest one think that political grandstanding by some members of Louisiana’s congressional delegation is a viable substitute for effective representation and an avenue to disaster recovery…think again.
U.S. Rep. Garrett Graves, apparently hoping to bolster his 2019 gubernatorial campaign, has issued a series misleading, mistaken and inappropriate claims about the disbursement of recovery funds.
His claim that his House colleagues are questioning what the state did with $438 million in recovery funds was absurd because, simply put, the money had never actually been received.
And he knows it. The claim was grandstanding in its purest form and made only in the interest of political capital to be gained. Flood victims in his district would be far better served by a more positive use of his office.
Sometimes you have to wonder why, when these guys are elected, they can’t just do their damned job.
Of course U.S. Sen. John Kennedy, also said to be casting a solicitous eye toward the governor’s mansion, couldn’t help offering, as is his custom, yet another of his trite homilies when he described the governor’s handling of the flood recovery contract as a “Three Stooges-like performance.” http://www.theadvocate.com/louisiana_flood_2016/article_a41326a0-1326-11e7-8805-574e2f9c803c.html
And the contract to administer the anticipated $1.6 billion in federal recovery funds was a major embarrassment because of the involvement of attorney Larry Bankston in trying to disqualify the low bidder when his son was employed by a firm affiliated with one of the losing bidders. http://www.theadvocate.com/baton_rouge/news/politics/article_aae4b7aa-101f-11e7-924b-037340aec399.html
Edwards must feel as if he’s being pecked to death by a duck.
Greater good could be achieved for all by taking the higher ground to enlightenment (to borrow a phrase employed by The Cincinnati Enquirer in describing a debate between William Howard Taft and former Democratic Secretary of State Richard Olney in the 1904 presidential race between Theodore Roosevelt and Alton B. Parker) instead of acting like a bunch of kids in a schoolyard fight.
People have been suffering for eight months now and they want to get back into their homes. They don’t need cheap campaign rhetoric; they want real answers.
And to compound their frustration, they now know they cannot look to their insurers for relief, either, thanks to lessons learned from Hurricanes Katrina, Rita, Gustav and Ike. http://www.nola.com/environment/index.ssf/2017/03/thousands_to_receive_small_pay.html
Thanks to a tactic affectionately known as Delay, Deny, Defend, introduced to Allstate and State Farm by McKinsey and Co. just in time for Hurricane Katrina, policyholders learned that insurers would rather fight than pay up. For every claimant who stuck it out and won a big award from his insurer, hundreds did just what the companies anticipated: they caved in and took settlements of pennies on the dollar simply because they didn’t have the resources to fight back.
http://www.delaydenydefend.com/excerpt/
Less than a week following the devastation of Katrina, Nationwide, on September 4, 2005, instructed its claims adjusters that “if loss is caused by both flood and wind, there is no coverage,” according to Mississippi Gulf Coast U.S. Rep. Gene Taylor.
Nine days later, on September 13, Taylor said State Farm instructed its adjusters that “where wind acts concurrently with flooding to cause damage to the insured property, coverage for the loss exists only under flood coverage.”
On-site damage assessment by engineer Jerome Quintero of Rimkus Consulting Group, contracted by Allstate to handle claims, said there was “insufficient physical evidence to determine the proportion of wind versus storm surge that destroyed (a) structure.”
That was in June 2006. But on November 4, Quintero’s conclusion of “insufficient physical evidence” was altered to read “Storm surge and waves destroyed the residence” by Rimkus staff who never visited the site. Quintero’s name was signed to the revised report without his knowledge, Taylor said.
So, in just those three examples, we have Nationwide, State Farm and Allstate implicitly telling their adjusters to blame Hurricane Katrina’s damage on water alone, thereby passing an inflated $23 billion bill on to American taxpayers.
Did we say inflated? Well, yes. As if that were not enough, Allstate devised a clever way of enriching itself while passing the cost of those claims on to the taxpayer-funded National Flood Insurance Program (NFIP).
Documents obtained by LouisianaVoice show that Allstate, which had an arrangement with NFIP under which it paid Allstate for handling flood claims, took full advantage of that position to protect its own financial interests.
If Allstate found itself on the hook for wind damages, it would use one formula for paying claimants but if it determined the damages were caused by flooding, a second, separate formula was employed. The difference was eye-opening, to say the least.
The formulae varied, depending upon location and on whether or not Allstate deemed damage to be from wind or flooding.
In one location for which LouisianaVoice was provided documentation, for example, if damage was from wind, Allstate paid 83 cents per foot for removal and replacement of drywall (sheetrock). If it was determined to be flood damage, that same dry wall removal and replacement—paid for by American taxpayers—was $1.53 per foot, a difference of 70 cents per foot. Painting that drywall cost Allstate 35 cents per foot if the damaged was caused by wind but cost NFIP (taxpayers) 58 cents per foot if it was determined to be flood damage.
For an average 2,000-square-foot home, that is an extra cost of $1,747 that’s passed on to taxpayers for the drywall and an additional $1,148 for painting—a total overcharge of $2,895.
Assuming Allstate handled 20 percent of total claims for Katrina and Rita in Louisiana and Wilma in Florida, the company would have handled some 48,000 claims, costing the federal government as much as $645 million in inflated claims costs, including overhead and profit, which are also calculated into each claim.
In Ocean Springs, Mississippi, the costs of removal and replacement of drywall was 50 cents per foot for wind damage and $1.12 per foot for flood damage. Painting was 26 cents per foot for wind and 83 cents for flood.
To remove and replace electrical outlets, the cost difference was even starker. For wind damage, the cost was $45.62 but if the damage was caused by flooding, Allstate reported a cost of $219.27 to NFIP.
Kermith Sonnier of Oberlin, Louisiana, is a public claims adjuster and provides the source of much of the information cited here. Company adjusters work for insurance companies and their work is generally geared toward saving the company every dime they can by low-balling claims or by denying them outright.
A public claims adjuster is independent who works only for claimants and Sonnier has spent hundreds of thousands of dollars of his own money doing just that.
Sonnier, with 38 years’ experience, was once a company adjuster for Farmers Insurance—until he learned a thing or two about the company.
He enjoyed an impeccable reputation in the claims adjustment industry, having worked the Exxon-Valdez claim in 1989, which until the Deepwater Horizon disaster in the Gulf of Mexico in 2010, was the worst oil spill in history.
In 1994, he was hired by Pilot which was under contract to Farmers to work claims stemming from the Northridge earthquake in California that year. But beginning in 1996, he said, Farmers began pressuring him to lower his loss estimates. He refused because he saw no grounds to do so and Farmers terminated him in 1997 despite a spotless work record. It gave as its reasons that it was reducing its work force even though it continued to hire other adjusters.
He sued for wrongful termination and won a stunning $10 million judgment against Farmers.
He, along with other experts in the field of insurance claims, will be working closely with LouisianaVoice in the coming weeks as we explore how those goods hands people, those good neighbors and those who purport to know a thing or two and who claim to be on your side will, when the chips are down, will do everything legally possible—and sometimes things not legal—to minimize or even deny your claim altogether.
Louisiana Voice 
Pure avarice, greed, and just pure evil. Wouldn’t it be beautiful if the tables could be turned back on them somehow? Thank you, Tom, for always shining a light on these dark, putrid places and people.
I have a naive question: What happened to the Louisiana Insurance Commission. I do remember that jail time is relative to the Commissioner position. But, isn’t this agency in some small way suppose to protect Louisiana citizens from insurance company abuses?
I don’t know where our insurance commissioner Mr. Donelon is on this, but I recall how he refused to get involved when Jindal & Kristy Nichols plundered OGB, between 2011 and 2013, saying it wasn’t his responsibility to oversee the management of state employees health insurance. Really!!
It’s really quite simple. The Insurance Commissioner is elected and thus, a politician who relies upon campaign contributions to get elected. The bulk of his contributions come from insurance companies and insurance executives who protect their interest by “investing” in the candidate. Yet another example of how big money deprives the citizenry of representative government.
I wrote via email to the commissioner and all our congressmen on the hill about NFIP he said he has no control over a Federal program
Since drywall is drywall and electrical outlets are electrical outlets and since Tom was able to demonstrate the National Flood Insurance program is being ripped off to the benefit of private insurers for their replacements, I, for one, have to wonder why the feds would put up with such a thing? How can they possibly plausibly deny knowledge of these facts? This is another in a long string of reasons people don’t trust our government to do anything right or at the lowest possible cost.
The partisan politics in which Garrett Graves and John Kennedy are engaged is outrageous, but I guess we have become such an ideologically divided nation their supporters applaud their every utterance and long for a Republican governor who can kick ne’er do wells off the wagon and make Louisiana great again.
I have to admit, though, that Garrett Graves has done more to represent Louisiana’s interests with regard to our flooding issues than any other member of our congressional delegation.
Apparently, both the state’s programs to provide flood relief were doomed from the outset. The shelter at home program was largely exploited by unscrupulous contractors doing shoddy work. The Restore Louisiana program will pay a contractor an outrageous amount in administration costs and, if we are to take the side of our governor, has been held up by the necessity to jump through bureaucratic hoops somebody in Washington should have had the common sense to streamline since this was an emergency. Where are the cries of federal government inefficiency and inertia from Graves and Kennedy?
I am better able to understand the state’s hesitance and fiscal constraints precluding front-end funding the Restore Louisiana program while waiting for funding to come down from Washington a lot better than I can understand the foot-dragging and burdensome federal regulations slowing down the release of the money. Regardless, the delay has been ridiculously disgusting.
As far as the good hands, neighbors and others on our side in the private insurance business, they are going to get their money one way or another just like Exxon/Mobil and we are going to pay for it whether in taxes or premiums.
And, Edith, if you’re like me, the best you expect from Mr. Donelon is that he will not follow his predecessors and certain other of our officials, including Mr. Bankston, who have “done a little federal time.” When he declared state group benefits to not be insurance and, therefore, not under his purview, I gave up on him. That was about the same time I gave up on the Public Service Commission who told me neither they nor anybody else regulates AT&T in Louisiana.
I really do wonder exactly who is actually looking out for us? Tom and others can only hope to shame people into action and shame is apparently becoming an anachronism not just here, but in D. C. as well..
Stephen, thanks for your insight. I feel like Charlie Brown playing football with Lucy.
The key is to fight to the end any way you can. You don’t have to be mean and nasty. I tell the adjusters and others that I respect their professionalism and have nothing against them personally. I make it clear that I NEVER GIVE UP! Those who fight for a justified settlement are the ones who win. The worse thing that can happen is a NO. If you quit, the outcome will simply be the same.
Two years ago we filed a claim for hail damage (Texas). As expected, it was denied. Next step is to fight. Adjuster came up with partial replacement scheme that was B.S. and I forced them to send in other adjusters. Suddenly my agent sends a computer generated notice that my homeowners policy would be cancelled at next renewal because of the unacceptable condition of the roof. Next I told the carrier that I wanted a certified Professional Engineer; (not a professional appraiser) to conduct an appraisal. That was not something they wanted to hear as it was on their nickel AND they would have to contract an independent service not knowing which way the deal would go. Fortunately an adjuster made comments that allowed me to argue the reality. It took three months, but insurance company folded and approved an entire new roof. New sheathing with radiant barrier protection, top grade shingles, four solar fans, new skylights and new gutters for the entire house.
Here’s why the fight was worth it. Total cost of roof (I asked for the document that detailed information agreed to between roofer and insurer.) was $46,000. My deductible was $3,600.
The “coup de grâce” was fascinating. My insurer has to give me a 5% policy discount for 5-years because I have a new roof with top grade shingles.
The Insurance Industry is a huge racket and the government is in collusion with these vipers. Actually, the vipers are running the nation. Every organization and department at the Federal, State and Local level has a heinous viper managing to rip off the public in one way or the other. Truth, ethics and fairness have all gone out the window and those that try their hardest to right the wrongs are squashed like a bug for their efforts.
Today’s society didn’t just suddenly evolve into this gigantic horde of corrupt vipers but were tenderly nurtured to grow ever bigger and stronger while the citizens never took notice. Like fleas, they have infested the host almost to the point of death.
Thanks Simply Simone! We should have someone looking out for the people but sad to say all they care about is their selfish selves.
I dealt with a lot of displaced people for Katrina. The fortunate ones who had two or three credit cards with high limits were able to gut their homes to stop mold from spreading and then sit back and wait for arbitration that took forever. At the end of the nightmare, the owner got back into their homes but were never compensated for the interest that built up during the long, long process. I can remember one customer who came to get his final paper notarized was out $8,000 in interest fees. If that is not shameful, then I don’t know what is.
All insurance in this state is a rip off. If you call and ask a question, don’t hold your breath to get a reasonable answer because no one knows what the heck is going on from the top to the bottom. It must be nice to draw a paycheck and not know you head from the opposite end and still remain on the job
Thanks to Tom for posting this and exposing it all. At least they might be able to read just how pathetic they are and get off their duffs and start helping the people.
In the meantime, let’s all pray for all who flooded.
Garrett Graves, Billy Nungesser, Jeff Landry – they are ALL grandstanding in hopes of replacing our Democrat governor in 2019. Whatever his shortcomings (& political liabilities), just please remember all, that JBE is head and shoulders above these clowns. Let’s work with and for him. The alternatives are so much worse.
Wow just imagine if the adjusters were from an independent agency/companies Like the FAA safety board,or our nations food processing inspectors.
Me I just want to cry demolished my home last week paid $50 to the contractor for permit finally had to go from Zachary to Gonzales to get it myself guess what got the permit but no fee Ascension parish waived all fees for those who flooded. I cannot get estimates ICC and SBA wants permits and estimates before they will give you anything even though you paid premiums for ICC insurance. Ascension says I have to raise my new trailer 8 ft but contractor wants his money when he finishes he won’t wait on ICC or SBA told me get a hardship appproval they quit that and the don’t send half now other half when finished I tried to make a loan for his $32,000 got denied. So today I called to ask them to give me half of what I’m approved for I will sell my land and go in a trailer park but then they want me to give them the money for my land or it will be duplicate benefits. And to and insult to injury I have no claims tickets or accidents on my driving record and State Farm went up $40 a month on my car insurance thanks for letting me vent and I’m open to suggestions.