OpinionJournal has a column well worth reading on how Trent Lott’s storm surge claim has lead to Congress effectively declaring war on property insurers:
Mr. Lott’s beachfront property in Pascagoula–one of three homes he owned–was swept away entirely by Hurricane Katrina’s waters. Like many Gulf Coast residents, Mr. Lott was soon reminded by his insurer, State Farm, that his policy only covered wind damage–not flood damage. The senator surely knew that, which is why he’d also purchased federal flood insurance. According to his flood policy that was in effect when Katrina hit, he was covered up to $350,000 in flood damages, and he presumably collected in full. [...]
State Farm, however, refused to cough up[...]
Since Katrina, [Lott has] slipped legislation into a Homeland Security bill requiring the inspector general of that agency to investigate insurers. He’s put forward a bill requiring insurers to “state clearly” on their policies’ “front page” what they don’t cover. He’s dropped another bill that would compel insurers to release more information about vehicles damaged by Katrina. Word is he’s even been looking into the industry’s tax rates.
But his big bomb came last week, when he introduced legislation that would end the insurance industry’s exemption from certain federal antitrust regulations. Mr. Lott suggests this is to keep big insurance players from conspiring to do evil things, though the reality is that the exemption mainly benefits small insurers who use it to pool statistically reliable data. So in his wrath, Mr. Lott may end up kneecapping many of the hundreds of small insurers who offer some real competition to the so-called conspiring giants.
A tip of the hat is due to the author of the piece, for nailing the problem of defanging the industry’s limited antitrust exemption with that last quoted sentence.
QandO offers a running commentary on the OJ piece, wrapping up with this punchline:
It would serve him right if insurance companies simply left Mississippi, refusing to write insurance policies there for any reason. And explain very carefully to their former customers that Sen. Lott and his ilk are the reason why. At would serve him more right if the voters turned him out of office at the earliest opportunity.
I couldn’t have said it better myself.
