It is quite obvious that the cleanup from two massive hurricanes will last for months. The massive rebuilding effort affecting five states will take much longer. A big fight over who will shoulder the enormous cost of damage to thousands of homes has already started. It appears that few homeowners in the hardest hit Gulf Coast states had any flood insurance. Standard homeowners’ policies attempt to exclude flood coverage. This coverage generally must be bought from the federal government and is capped at $250,000. The real problem will be to determine whether the structural damage was caused by “flooding” or by “wind” or by the “storm surge.” In my opinion, the insurance companies should pay all legitimate claims and not try to find ways to avoid paying for covered losses. I say give the companies a fair chance to do the right thing but don’t let them refuse to pay valid claims in full. The Insurance Commissioners in Alabama, Mississippi, Louisiana, Texas, and Florida must get actively involved to make sure the policyholders in their states are protected. When putting the final parts of this report together Rita had hit shore and early reports were coming in. Therefore, I am not aware of the full extent of the damage from that storm. I pray it wasn’t as bad as forecast. Early reports indicate that appears to have been the case.

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