By now, you’ve probably heard that Trent Lott plans to retire from the Senate on 31 December (just before new rules that would prevent him from becoming a lobbyist take effect).
Sam Friedman at National Underwriter observes:
Property-casualty insurance groups offered gracious farewells following the news that Sen. Trent Lott would be leaving Congress before year’s end. But most industry lobbyists no doubt were breathing a sigh of relief, given the animosity the Mississippi Republican displayed after complaining about how he and his constituents were left out to dry on Hurricane Katrina homeowners claims.
As reported by our Washington bureau chief, Dave Postal (click here for his full story), Sen. Lott promised to “bring down” the industry for its poor handling of Katrina claims where evidence of both covered wind and uninsured flood damage was present.
In his post, Sam touches upon something that I have said semi-flippantly…and which others have said in all seriousness:
Critics say that just goes to show that State Farm should have spared the industry the wrath of Sen. Lott and just settled the claim up front.[...]
Had State Farm paid off the claims of politically-influential policyholders such as Sen. Lott, despite their conviction that he was not entitled to coverage, that would have amounted to bribery. The industry would have been hit even harder once such blatantly preferential treatment was inevitably exposed.
I agree with the point that Sam’s making, I disagree with some opinions that could be formed by extending that thought beyond these specific circumstances.
Every insured, regardless of perceived prominence in day-to-day life, deserves to be treated fairly and to have valid claims settled as quickly and painlessly as fairness permits. However, it is naïve to assume that perfection is possible. Mistakes will sometimes occur.
Therefore, a case can be made, I think, that it is wise for a personal lines insurer to be aware of who notable insureds are on their books. While those notables shouldn’t receive “special” treatment or consideration, it’s probably not a bad idea to ensure that company management keep closer track on how those customers are being handled.
