Wednesday, May 31, 2006

My Testimony Against the Insurance Industry

Today I addressed the Louisiana Senate Insurance Committee. I heard the stories of dozens of people in similar and worse situations than us. In the end I think it was a huge victory for the people and a major slap in the face for the insurance industry. SB 620, which increased the penalty from 25% to 50% of the claim, and also added attorney's fees to the penalty, passed the House Committee and now looks likely to be passed by the Entire House. So that means I won't be hiring a lawyer to file our case until this becomes law. Also HB 510 passed the Senate. This meant that insurance companies had to pay what they covered even if something happened later that they didn't cover. For example, one guy's house was destroyed by a tornado, and a week later the ruins of the house flooded. His insurance company denied the wind claim because of this. Anyway, I'm so glad I testified, and I think it was a real victory for people like me who are being screwed by the insurance industry. I wrote the following speech yesterday, though I didn't look at it while I testified because I wanted to speak from my heart. But it was fairly close to the text, and here it is:

First, I would like to thank the Chair of this committee, Representative Carter, and the rest of you distinguished Representatives for your time today. I know you are busy, but what I have to say today I feel is important. And I would like to add that this is the first time in my life that I have addressed a legislative body. I'm pretty excited about that. But what brings me here today is the personal unfortunate odyssey that my family and I have suffered through because of the bad faith of Allstate Insurance over the past nine months.

My wife and I purchased our first house about five years ago. We moved from Jerusalem to New Orleans when I accepted a position to teach Theology at Xavier University. We were very attracted by what New Orleans and Louisiana had to offer. We were also committed to making New Orleans a better place to live. To reach this end, both my wife and I went in to education. She is a school teacher in the New Orleans Public Schools, where our children also attend. Our home is in Mid-City, a great neighborhood in the heart of the city. We also got involved in neighborhood organizations, and volunteered much of our time at worthwhile charities such as Habitat for Humanity. In short, we were doing great. We were doing jobs that we loved, working to make New Orleans a better place, and at the same time we were building up equity in our beautiful 100-year-old home. However, our dreams were literally blown and washed away on August 29th of last year.

The winds of hurricane Katrina racked our two-story house. I was inside the house during the storm and it was like being on a large boat rocking back and forth from the wind gusts. Then flood waters covered the first three feet of our house and they remained at least 10 days damaging the foundation and piers so now our house leans even more. Right now as I speak our home is in danger of falling onto our neighbor'’s house. We have been told by several experts not to gut the house, as if we did, it would likely fall over. Because our schools reopened in December, we moved back to New Orleans. Allstate kept delaying our claim and not returning our phone calls and letters. Because we weren'’t assured Additional Living Expenses, we moved back into our racked house and have spent the past five months living upstairs where it didn'’t flood. And we waited, and waited, and waited on Allstate.

We filed our claim for wind and flood two days after Katrina. We expected things to move along quickly, but we were wrong. It took us more than eight months to hear back from Allstate, and when we did it was horrible news. They are denying coverage for the structural damage of our house based on a fraudulent engineer's report submitted by Haag Engineering. This report actually claims that the winds of Hurricane Katrina were not strong enough to rack a house, and they even seem to question whether or not our house flooded, even though the flood line is still visible nearly 3 feet above our floors. At one point the report even refers to our house as "the Wilson house," which shows the same outfit is denying many similar claims. They claim that our house was racked before Katrina, ignoring the broken boards on the front of our house showing clear and recent separation. Thankfully, I have extensive photo and video documentation that thoroughly addresses every point made by these so-called engineers. Moreover, my wife and I have kept an extensive journal documenting every phone conversation, unreturned calls and letters, and interactions we have had with Allstate. I want you to know that a wind adjustor visited our house for the first time just two weeks ago. We recently filed a complaint with the LA Insurance Commissioner James Donelon. We are in the process of getting an attorney to take Allstate to court. We believe that our situation exemplifies the bad faith with which Allstate and other insurance companies are acting towards the citizens of Louisiana. In short, we are fighting back and have the truth and extensive documentation on our side, and I'm confident that in the end through the court system we'’ll prevail. But I think that Allstate is counting on many to not fight back. If my mother was in our situation, for example, I imagine she would just give up and not fight, because fighting Allstate has taken an incredible amount of time and energy. I have published several books in my career, and honestly dealing with Allstate after Katrina has taken much more time and effort. I wish I could get back to writing books.

When we purchased the house we entered a legal agreement with Allstate, and they insured our house for $160,000 against wind and flood damage. Now Allstate has violated that contract, and my family and I are in dire financial straits. We bought the house for $157,000. Before Katrina it was appraised at $215,000. Because of the current structural damage, it has been appraised at $30,000. In short, we owe $145,000 on our mortgage, and own a house now worth $30,000. We don'’t want to declare bankruptcy, though it might be the most sensible course of action. We have decided to rebuild, as we believe that the great city of New Orleans should be rebuilt. Even though we have accepted an SBA loan that likely has enough money to fix the house, in the end to get our house to where it was before Katrina, we would have two mortgages totaling $300,000, and our house redone isn'’t worth that even in the current inflated market.

In short I want you to know that there are many people like me, who were responsible, and careful, and civic minded, and we had insurance. But when the worst disaster in this country's history struck and severely damaged our insured home, Allstate purposefully waited eight months, and then told us that our insurance was basically worthless. They ought to be forced to live up to their end of our contract. I want you to know that my case is but one of many. Allstate, like the insurance industry after Katrina and Rita, is at times acting unethically, dishonestly, unjustly, and their actions are in violation of the laws of this great state. Thank you for your time as well as your attention, and I hope that you'’ll vote on bills such as SB 620 with people such as me, my wife, and our two children in mind. Thank you.


Anonymous said...

All the power to you and your family. I wish you all the best in exposing another part of the most shameful disaster in the history of this country. The insurance companies need to be taken to the cleaners with record profits just like their cousins the oil companies.

Anonymous said...

Perhaps the faint silver lining in all this happening to you is that you can now speak so authentically and eloquently on behalf of those who can't. Best to you and your family.