Wednesday, September 21, 2005

Insurance will cover it — when pigs fly

>by Heather Mallick
September 18, 2005

Here's one Americans weren't expecting: If you're a relatively calm New Orleans homeowner, because a) you're alive and b) you're insured, think again. Insurers won't pay out. You protest that there was a hurricane. And you were covered for that.

No, your insurer says. Your house wasn't damaged by a hurricane. It was damaged by a flood and you weren't covered for that.

You may be insured for the aneurysm that starts travelling to your brain upon hearing this, but only if you die. If you survive the aneurysm, the phrase “pre-existing condition” will haunt your days and nights. Of course, it wasn't a pre-existing condition until the hurricane hit, but it's these fine issues of timing that make insurers so very rich and you so very homeless.

The only way you would be covered in New Orleans is if you had bought a second policy from the National Flood Insurance Program, which is, get this, part of the famed Federal Emergency Management Agency. Fewer than half of households had held such a policy, but given that FEMA was being run by a guy whose only qualification was having roomed in college with one of George W. Bush's pals, and FEMA didn't even have hurricane-issue Kleenex, don't expect cash any time soon.

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