Flood Coverage Lawsuit over Flood Exclusion

Ok, it’s started. According to the NY Times, http://www.nytimes.com/2005/09/16/business/16lawsuit.html?oref=login – Mississippi Sues Insurers Over Damage From Storm.

Apparently Mississippi thinks that the home insurance policy exclusion for flood is confusing. Every insurance regulator in Mississippi understood that flood was excluded by property insurance policies. Since 1968, the federal government has provided flood coverage. The people at the National Flood Insurance Plan have spent millions and millions of dollars on advertisements that say, “Flood damage is not covered by your home insurance policies – buy our flood insurance.”

The flood exclusion is arguably the most often discussed exclusion in the insurance world. Almost every insurance article or website has the phrase, “Flood is not covered.” A search in Google for articles and websites with the words “flood” and “excluded” comes up with 1,760,000 hits. “Flood,” “not,” “covered” comes in at 9,580,000.

I think that the flood exclusion is the easiest exclusion in insurance to understand – if it is a flood, there is no coverage.

But still, the government of Mississippi thinks that their citizens are confused.

To my readers in Mississippi, if you didn’t buy flood insurance, your insurance company should walk away from your flood damage. Wind damage they should (and will) pay for – flood damage, no.

To my readers in Washington. Why should the US taxpayers pay for the stupidity of those who did not buy flood insurance? What about the taxpayers who were responsible and paid for flood insurance?

As adults, we have a responsibility to make decisions. When we make good decisions we should be rewarded. When we make bad decisions we must live with the consequences.

Charities and families can and should step in to help the unfortunate. Those who wish to help can volunteer or donate. It is, however, not the government’s role to take on the rebuilding for those who decided not to insure themselves.

And for God’s sake Mississippi, drop this idiotic lawsuit!