An interesting article posted today on MSNBC.com details how the insurance companies have failed to help small business owners victimized by Hurricane Katrina. After the horrific storm, the insurance companies denied practically all claims, considering the damage as uncovered flood losses. Amazingly, the insurance companies made a record profit after the storm — $64 billion in 2006 — while still refusing to pay on small business owners’ claims.
Non-payment has had a devestating effect on small business owners in the Gulf. Small business owners still must carry wind coverage, standard insurance coverage for fire, vandalism, liability and if they are in a flood zone, they must carry federal flood coverage. For example, Mark Currier who with his wife runs Clay Creations in Old Town, Miss. saw his annual insurance bill go from $7,000 to $25,000 before going back down to $17,000.00. Some owners believe that a final decion regarding insuring the country from catastrophic losses will have to come from the federal government. Rep. Gene Taylor is pushing legislation to end the federal antitrust exemption enjoyed by the insurance companies. Ironically, Taylor lost his own home to Katrina. Recently a reporter asked Taylor what he would like from the Easter Bunny. His response: “State Farm’s head on a platter.”