Warning: Parameter 3 to mb_videobot() expected to be a reference, value given in /nfs/c03/h07/mnt/57630/domains/katrinaroadhome.org/html/14/libraries/joomla/event/dispatcher.php on line 136
Without Insurance, Nobody Rebuilds



After Hurricane Katrina devastated the Gulf Coast in 2005, many homeowners discovered that getting insurance money to rebuild depended on the type of damage their homes sustained.  Although private insurance companies sell both wind and flood insurance, they only pay for wind damages.  The federal government, through the National Flood Insurance Program, or NFIP,  pays for flood insurance.

After Katrina, the NFIP fell $18 billion  in debt.  How did this happen?  Critics say it’s because the flood insurance program is poorly designed and badly run by the Federal Emergency Management Agency,  FEMA. Some even accuse private insurers of bilking the government – writing off wind damage as flood damage so the NFIP would have to pay the bill. Explore this site, and decide what you think.


share_story submit_comment




Some Background


Insurance companies were typically risk averse after Katrina.  But historically there are precedents for enlightened action from the industry.


After the Great New York Fire of 1835 destroyed the headquarters of several major companies, the industry championed the creation of the city's first municipal water supply.  Their reasoning: It would be cheaper to create the infrastructure for water to fight fires than to continue to pay claims resulting from the destruction.

And in San Franciso in 1906, after an earthquake flattened the city and fire burned what remained, Lloyd's of London ordered its American agents to pay all claims in full "irrespective of the terms of their policies."  At least a hundred insurance companies had written some 90,000 policies prior to that disaster.  While a plurality resisted paying claims, the 1906 disaster is remembered primarily as a time when the industry met the need even when doing so conflicted with their stockholders' interests.

Sources:  NYC Fire Museum

"A Crack in the Edge of the World:  America and the Great California Earthquake of 1906," by Simon Winchester.  Harper-Collins, 2005.




vidpanel_lt vidpanel_rt



New Orleans resident Herbert Gettridge describes his experience with two insurance companies.  None of the Gettridge family homes are involved in the insurance bilking allegations.  Most of their homes were underinsured, meaning that while they bought flood insurance as their mortgage companies required, the value of their homes rose – but not the value of the insurance.




Add this page to your favorite Social Bookmarking websites
Reddit! Del.icio.us! JoomlaVote! Google! Live! Facebook! StumbleUpon! Yahoo! Free social bookmarking plugins and extensions for Joomla! websites!

Comments (3)Add Comment
February 05, 2009

Insurance problems still happening.

February 05, 2009

Insurance issues plague me.

February 05, 2009

why are they happening

Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.





NFIP - The National Flood Insurance Program.  The federal program that guarantees homeowners are covered for flood losses.

FEMA - The Federal Emergency Management Agency.  Administers the NFIP.

WYO - Write Your Own insurance:  FEMA's name for outsourced flood insurance policies. FEMA contracts with existing insurance companies to sell, adjust, and settle flood claims.