Wednesday, February 08, 2006
Senator now just an upset homeowner
It's a battle of titans. Mississippi Republican Senator Trent Lott is suing State Farm insurance to get them to pay for his hurricane-damaged home.

Hurricane Katrina leveled Lott's 154-year-old waterfront home in Pascagoula, Mississippi, last August. The insurance giant says the storm surge destroyed the home. Lott had federal flood insurance, but not enough to rebuild.

The house was worth $750,000. Lott got on the Senate floor in December, pounded his fist and said homeowners along the Gulf Coast are fed up, warning that insurance companies better do the right thing or there will be "hell to pay..."

One of Lott's more colorful neighbors, Pete Floyd, is still finding some of Lott's personal effects in debris strewn throughout the neighborhood, including a Christmas photo of Lott and a silver plate Lott's daughter received as a wedding present. Floyd paid about $300 a year for flood insurance and received $130,000 dollars from his insurance company.

We chased after both parties for interviews, but Lott's office says he isn't talking about this "personal" issue. State Farm isn't talking either, saying it is a matter of "litigation." In court filings, State Farm says precedent is on their side.

It's a familiar scene being played out in courtrooms across the Gulf Coast.

Correction: An earlier version of this post reported that Senator Lott did not have flood insurance on his Gulf Coast home. In fact, Senator Lott did have federal flood insurance. CNN regrets the error.
Posted By Sean Callebs, CNN Correspondent: 2:21 PM ET
  29 Comments
If hurricane force winds knock over a tree that destroys a house, insurance will pay to repair the house. But if those same huricane force winds blow a storm surge that destroys a house, insurance will not pay?! Where's the logic in that? The insurance companies need to realize that hurricane force winds caused the destruction of those properties, not flood water.
Posted By Anonymous Pete Gortner, Newport RI : 2:31 PM ET
This story continues to make me sick. It is very sad that these issues are settled one at a time and only after media attention.
Posted By Anonymous Karen, Wakefield, RI : 2:31 PM ET
Welcome to how everyone else has to deal with things!
Posted By Anonymous Jim, Elgin. Il : 2:32 PM ET
Well I guess it's a good thing it happend to someone "higher up" because this is happending to allot of people in the Golf Coast so lets hope Lott can "make a difference". Isn't the flooding a result of Katrina? So wouldn't Katrina be the cause? I am not an insurance agent but have worked in the insurance business before. The goal for these companies it to find every way possible not to pay out a claim. It is a sad fact but very true.
Posted By Anonymous Rachel-Albuquerque, NM : 2:36 PM ET
Flood damage versus hurricane damage.
It is quite obvious that the storm surge caused by the hurricane broke the dams and caused the damage. So it is in fact hurricane damage. I think we need to make insurance companies spell out in plain language in their polcies the details that constitute hurricane, tornado, fire or other damage, or perhaps we need the government to define it for them. Working in the mortgage industry I have found that most home owners do not have a good basic understanding of what their home owners insurance really does for them. Litigation can also be decided on general public "assumption" or general public "understanding".
Posted By Anonymous Sheila Vive, Lakeland, FL : 2:37 PM ET
Although I am sorry that Senator Lott is having such difficulties with an isurance company, I would like to welcome him to the real world where the average citizen dwells and where difficulties with insurance companies are a constant.
Posted By Anonymous Michael Short Cleveland, Ohio : 2:37 PM ET
When you are injured at work or in a
car accident and you sue, that is a "frivolous lawsuit". When a Republican Senator sues for losing his mansion it's justice.

Actually, I think Lott is right to do what he is doing, but he should also stand up and protect that right for everyone else as well. His voting record doesn't show a history of doing that.
Posted By Anonymous Greg Denny Pelham, Alabama : 2:39 PM ET
Mother nature, as well as insurance companies do not care who you are. This just proves to show anyone is at risk when it comes to a natural disaster, or dealing with an insurance company!
Posted By Anonymous Tam, Nashua, New Hampshire : 2:40 PM ET
Apparently, Senator Lott must not really think trial lawyers are so bad. It's interesting to know how Senator Lott would feel if his Republican colleagues called his lawsuit "frivolous" and tried to limit his recovery. I'd also like to know whether Senator Lott would gladly accept the ruling of an "activist judge" if it benefited him personally in this case.
Posted By Anonymous EJ, Miami, FL : 2:48 PM ET
Trent Lott lost his historic house and that's sad. I'm sure he'll recover. So many others lost their mothers, fathers, sisters, brothers, sons & daughters. Lott is part of the political problem (Republican & Democrat) that continues to leave our shores vulnerable to a host of natural and political disasters. I don't wish disaster on anyone, but certainly he's not at the top of my sympathy list. Please cover the victims. Please cover how the current administration is leaving the storm ravaged towns to fend for themselves.
Posted By Anonymous Bob McCranie, Carrollton Tx : 2:49 PM ET
I agree the Senator has a right to argue with the insurance company over his personal losses. However, I'm sure the senator has a roof over his head, clothes on his back and food on his table. Maybe he should hold off addressing personal problems and find out why FEMA trailers for people with nothing, are still waiting to be issued?
Posted By Anonymous Guy, Hallstead PA : 2:59 PM ET
The fact that insurance companies provided "hurricane" insurance distinct from and not including "flood" insurance is the biggest case of insurance deviousness I've heard of, particularly when the properties lay as close to the water as those in South MS and LA. I think the federal government should intervene and force the companies to pay if there was a hurricane insurance. Golly, the poor companies might break even this year instead of obscene profits. Breaks my heart. Not.
Posted By Anonymous Brigitte M. Canada : 3:02 PM ET
Hmmm. I wonder if this had not hit the senator so personally if he would be going up against the big insurance companies? Of course, I feel for his losses--I have lost everything in the wake of Katrina and because the government was negligent in not protecting my city from flooding. I lost my home in New Orleans and all my possessions. I lost the job I loved and have been unemployed for almost 6 months in Texas. My gutted house sits, waiting for the politicians to tell me if I can rebuild my home which is less than a mile from the London Ave. canal break. I hope that politicians can put themselves in our shoes without having to actually walk in them. Too many people have been hurt because of bad policy. Katrina merely exposed the problems.
Posted By Anonymous Paige, Dallas, TX : 3:05 PM ET
Why report on a senator that lives in a 750,000 home? I bet that he has a lot more options then people living in 150,000 homes or worse people who were renting - I guess it makes for a good story.......
Posted By Anonymous Stacy Toronto Canada : 3:06 PM ET
Take all the money youv'e spent on insurance the past 25 years and put it into a high risk fund. You would be a very rich person today. Insurance is a very profitable business, they don't care about a lifetime of memories. It should be a pre-requisite for insurance brokers to empathize a little. Disasters just mean higher rates, the insurance companies will never not turn a profit.
Posted By Anonymous John Grouchy Toronto, Ontario : 3:07 PM ET
Reading ALL those horor stories from the Gulf Coast doesn't make us too proud to live in Free and Rich countries, it just doesn't make any sense that so many people are left without housing or that some are still fighting over insurance money after 5 months plus. When will they be able to move on ????
Posted By Anonymous Manon, Longueuil, Quebec : 3:08 PM ET
I know that we should feel sorry for Senator Lott. However, there are so many people that probably had no home owners policy at all. They won't get anything back, and now they have no jobs to come back to. I hope that Trent Lott can get back what he lost however, he needs to see that he has a whole lot more than most residents there will ever have.
Posted By Anonymous Kristen, San Angelo Texas : 3:09 PM ET
So the imperial court (congressman) finds out about "common" bureaucracy that plagues the American folk...how sweet.
Posted By Anonymous Mike, Arlington, VA : 3:13 PM ET
This is a classic chicken and egg debate: What caused the flooding? Do we have proof that the foundation and stability of the house was not somehow weakened or even damaged to some extent by the hurricane, thus making it more succumbing to the ensuing flood? But I have very little sympathy for Lott - the man is rich enough and has got connection in high places. It would be easier for him to have someone pick up this tab, afterall, when Lott gets back to the Senate - well, you get my point. But if Lott really is doing this for the principle of it, then he should organize a class action lawsuit, which would include all the residents of the the coast areas including New Orleans and take the fight to big insurance (hold on, wasn't Lott supporting the Bush White House on Tort Reform, oh oh!) Problem is, if he actually does this, he would be lucky to have one GOP colleague on his buddy list.
Posted By Anonymous Charles O.C., Athens GA : 3:15 PM ET
A person can spend thousands of dollars, over time, for insurance coverage. Seems the insurance company executives don't want to miss their house payments, the boat payment, how about the wedding for their daughter? The usual lines I have heard are: "You are not covered for "Acts of Nature." "You are not covered for riots." Talk about "blue sky!!" What else is NOT included in your insurance policy? If these companies actually paid up as they should, they just might go out of business. Poor babies.
Posted By Anonymous Blackrose Grnwd, SC : 3:21 PM ET
I hope Mr. Lott understands that this is the type of problem little people have with insurance companies everyday. I hope he takes the lead in the cause against greedy insurance companies and not just quietly settles his claim out of court.
Posted By Anonymous Hiram G, McAllen, TX : 3:24 PM ET
How sad that Sen. Lott lost his home and must battle a bureaucracy for help. But he's not the only homeowner frustrated by red tape. The next time he stands in the Senate and rails against insurance company policies, maybe he can also demand a streamlining of the governmental nightmare -- federal, state and local -- that is keeping thousands of other Katrina victims out of promised FEMA trailers.
Posted By Anonymous Julie, Davison, Michigan : 3:25 PM ET
Maybe Trent Lott can get one of his lobbyist friends to buy him a new house.

Seriously though, Katrina was an unfortunate but powerful lesson in the importance of being properly insured.
Posted By Anonymous Lizzy, Stanford, CA : 3:27 PM ET
It's hard to feel bad for Trent Lott. He's not currently living in homeless limbo like many of his gulf coast neighbors. It's also ironic that a senator from a party that more often than not sides with big business would be suing his insurance company. That being said, I hope his outrage helps to get his more needy neighbors what they need.

I'm a bit surprised with State Farm. A few years back an unbelievable hail storm/tornadic weather hit North St. Louis County and caused massive damage. Basically everyone had insurance claims, which in the end total millions for State Farm. My own car was totaled in the storm due to the softball sized hail and the roof of my house was greatly damaged. There was initial chaos, but I thought State Farm did a very good job with the situation and we didn't have to fight them at all. Obviously the gulf coast disaster is much more expansive, but that's no reason to try to cheat people.
Posted By Anonymous Stacy, St. Louis, MO : 3:27 PM ET
Would the storm surge have happened without the hurricane force winds pushing the water into all of these homes. The insurance companies are wrong and should do the right thing.
Posted By Anonymous Taylor -- Boca Raton, FL : 3:32 PM ET
Insurance companies find lots of ways to not pay out on claims. Right now I'm trying to get funds to rebuild a part of my house that was damaged when the property owner next door decided to remove his half of a common wall. The insurance company's response? "The houses were poorly built, and the policy doesn't cover poor construction." Funny, they were willing to accept my premium for 20+ years for that same "poor construction" (which, by the way, has stood for over 60 years, and withstood teenagers - not quite hurricane force, but almost).
Posted By Anonymous BS Cosner, Baltimore, MD : 3:36 PM ET
On May 8th of 2002, Sen. Lott is quoted as saying "I'm among many Mississippi citizens who believe tort reform is needed." Now that he has filed his own suit against a member of an industry that has been putting the screws to average Americans for many years, I wonder if the good Senator would care to retract his previous statements?
Posted By Anonymous Kent, Portland, OR : 3:52 PM ET
Having been employed in the insurance industry for some time, my advice is to READ YOUR POLICY! You are paying far too much in premium dollars to not know what you're paying for! And that's just plain silly. Too many insured people say they have "full coverage" but can't accurately say what that means! I disagree with the previous comment that insurance companies try to avoid paying on losses. Think about what kind of trouble an insurance company can get into if that was true. The policy is a written contract, and the role of the adjuster is to pay a fair and equitable for eligible losses per that contract.
Posted By Anonymous Virginia from Missoula MT : 3:57 PM ET
I am from Pascagoula, Ms. To kinda clear this up, my parents live about a quarter of a mile inland from the gulf in Pascagoula. It has NEVER flooded there or at where Senator Lott's home stood (in recorded history of course). The city has a detailed map dictating what are considered "flood prone areas". Most people that lived outside of these "flood prone areas", including my folks, did not carry a flood policy on their insurance as flooding was not considered a real threat. Then hurricane Katrina came. Where sea water had never touched dry land, the hurricane's winds pushed an 8 ft wall of water through my parents' house and destroyed everything. In a matter of minutes the water had receded, but the damage was done. Those same ferocious winds knocked a tree limb onto the roof and also caused some damage. The roof was covered (about $6000), but the water damage was not (about $90,000). This scenario is common to thousands and thousands of people all along the gulf coast. From the insurance companies' perspective, they have found a loophole to get out of paying for damages caused by the storm surge. Of course any managing partner of one of these companies will not pay if there is a way out. It is a business decision. There are billions of dollars worth of uncovered "surge caused damages" along the coast. The place is still a nightmare. It will have to be decided in court. Please stop confusing Mississippi with New Orleans. Go tour New Orleans, then come see the coast of Mississippi. You will see that the real devastation occured here. By the way, Pete Floyd is my uncle.
Posted By Anonymous Dale Stanley, Pascagoula Ms : 4:10 PM ET
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