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.
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.