Sandy, and doing the right thing


In the aftermath of Hurricane Sandy, there have been far too many horror stories regarding insurance settlements, or lack thereof.  A recent article from ABC News talked about a couple from Staten Island, who, while witnesses claim their storm damage came mainly from hurricane-force winds, have been unable to received ample coverage because their insurance company, Allstate, insists the majority of the devastation was due to flooding.  To add insult to injury, portions of their home have been featured as part of ads currently running for Allstate on major media outlets.

Makes you a bit nauseous, doesn't it?

As someone who lives in Breezy Point and whose home has received substantial flood damage, I can tell you that our journey has not been an easy one, albeit we do have flood coverage.  But the dilemma seems to be occurring across the Tri-State area: insurance companies unwilling to settle for even a marginally legitimate amount, leaving homeowners to foot the bill.  What set me off this week were some of the comments posted in regards to the story mentioned above, particularly from one "Denise" who apparently understands insurance more than most.  She wrote this:

"The BOTTOM line is.. if you LIVE in a flood zone you best carry the insurance or pay the price! I have worked for [State Farm Insurance] and a flood insurance company, dont pay and yep that is your loss...fact of life.."

When I see effortlessly impersonal quotes such as these, I have to restrain myself from wanting to give people like Denise a good shake.  But rather than get too upset, I figured that maybe I'd simply be able to voice my opinion on all of this and see if it resonated.  And so I would like to publicly address this "Denise" with a personal question, if it please the court of Public Opinion.

Denise, may I ask if you've ever been in a so-called Catch-22 situation?  Where no matter what decision you make, even if it's the most informed one, one which feels like the most upstanding thing to do, it will still screw you in the end?  This is how anyone (and everyone) dealing with this disaster is feeling right now.  This is how my family is feeling right now, and we do have flood insurance.  And the fact that you can nonchalantly keep your emotional or empathetic distance by saying "fact of life" is the exact reason why everything about the idea of insurance doesn't match up with its actual results. 

To my knowledge, there are literally billions of dollars in assets and reserves in the Tri-State area when it comes to all types of insurance policies.  I don't wish to overstep that knowledge and assume, but let's just hypothesize that there's a possibility that "billions of dollars in assets" could translate into "if everyone in the Tri-State area filed a substantial post-Sandy claim (fire, flood, home, auto) and settled close to their maximum, the companies controlling these assets would have little problem settling and still not have to worry about going insolvent."  Now, of course, this is not the case; most claims entered have to do with flood damage, and so flood insurance is supposed to be picking up the tab for many of these cases.  However, the Catch-22 comes into play with the verbiage & how easily so many other sort of policies were able to jimmy their way out of having to deal with this disaster directly.

No one is really sure which meteorologists classified Sandy as a Super-Storm, but whoever the insurance executive was that took that term & ran with it, I'm sure, has received a promotion, a pay raise, or at least a pat on the back from his or her contemporaries and his superiors.  By utilizing the idea that Hurricane Sandy was not really a hurricane at all, insurance companies were able to hold off liquidating their assets to settle claims that would have otherwise been an admitted strain on company resources.  And so, again, flood coverage has been & will be the majority source of claim settlement and payout.  Is it legitimate?  By all standards and practices, yes.  Does it make it right?  In my view, absolutely not.

I'm not sure, Denise, if you've ever experienced a disaster in your lifetime.  I don't know you, and I would be insulting your personal life experiences to cry out that "you don't know what we're going through."  That wouldn't be fair to either side of that argument.  Still, I don't think it would be a far-fetched idea to suggest that at some point in your existence, you've had to deal with some sort of incident where something you've worked very hard to create or maintain was taken away from you in far less time than it took to create or maintain.  In those instances, I want you - and every other insurance representative or executive - to remember what you felt.  I want you all to remember whatever feelings, however big or small, of despair, depression, and anger, were attached to those instances.  Now I want you to imagine that on top of these feelings, there is a force involved - that you bought into, financially, emotionally, or otherwise - that was originally designed to help you cope with this instance, but at the very height of your conflict, this force found unforeseen ways to back away from its original design.

If that proverbial icing on the cake ticks you off, even if only a little, there is some humanity left in you, and you have a heart.  If you have no emotional input in a case like that, I feel sorry for you, and can only imagine what it's going to be like for you when something like this does happens to you.  And not to sound Karmic or send ill-fated vibes towards you all, but it will happen.  That's not a zealous or prophetic statement.

It's a fact of life.

I come from a family of hardworking, tax-paying, upstanding people.  My parents were both civil servants of the City of New York, working for the FDNY and DOE respectively.  If anyone understood the importance of protocol, following guidelines, and respecting the system, it would be them.  But they also understood that sometimes you have to bend guidelines and respectfully circumvent the system.  Why?  Because sometimes that's the only way you were able to do the right thing.  And if there's anything my father taught me growing up that actually stuck, it was to always, always try & do the right thing.

I know it seems ridiculous to you, Denise and other insurance pundits, that in these days and times, doing the right thing whilst working for Corporate American Insurance is a laughable paradox.  As was told to me when I worked for commercial Auto insurance, the goal of any insurance company is to make money.  I don't pretend to presume not to know this, and I don't expect there to be a major turnaround in policy over my comments.  What I would like to know is that somewhere, somehow, someone who works for one of these companies has at least one moment of, "Wow, maybe this kid has a point.  We could probably try & work out better outcomes for our customers going through this.  They could really use a break right now."  

Because let me tell you, we really could.  And judging from the amount of money being paid into insurance conglomerates in the Tri-State area alone, we should.

For the record, the Staten Island family who got undercut & exploited by Allstate has contacted litigation and has begun proceedings on what I'm sure will be one hefty lawsuit.  And for all you Denises out there who like pointing out the facts of life, the facts are these: the damage from Sandy was caused by flooding.   This flooding was brought on by an unprecedented super-storm.  That super-storm would've never come to pass if there were no hurricane to supplant it.  Put simply, the ultimate damage done to the Northeastern seaboard was due in major part to a hurricane.

Of course, you can slice the facts any which way you like.  I just chose to do the right thing.