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Insurance Claims Payment Processes in the Gulf Coast after the 2005 Hurricanes

August 3, 2009
Committee Remark
Rep. Maxine Waters [D-CA]: Opening Statement

Good afternoon ladies and gentlemen. I want to thank Mr. Watt, our new Chairman of the Subcommittee on Oversight and Investigations, and Ranking Member Rep. Gary Miller for holding today' hearing, Insurance Claims Payment Processes in the Gulf Coast after the 2005 Hurricanes".

We will soon reach the two year anniversary since Hurricanes Katrina, Rita and Wilma devastated the Gulf Coast Region of this country. Leaving destroyed homes, businesses and shattered lives. What many of us did not expect was for the insurance industry to abandon so many home owners and business owners because of differences in the interpretation of claims related to wind and water. In fact, as this hearing is being held there are countless numbers of persons in the Gulf Region who have yet to receive any money for insurance claims they may have filed.

The Hurricanes Katrina, Wilma and Rita totaled $56.5 billion in losses. The total economic losses associated with Katrina alone are likely to exceed $200 billion. You see, we still have not calculated all of the losses related to the hurricanes. Much of the damage from Katrina was related to flooding, while wind is attributed to other damage. This distinction does not help those who have suffered losses without any funds to rebuild or to start all over again.

Today's hearing  acknowledges several insurance coverage issues, including losses from floods not covered under homeowners insurance policies, and homeowners' suits against insurers seeking to void the flood exclusion in homeowners policies. In addition, we will hear about the wind/water debate, which is at the center of many of the unpaid claims.

I am particularly interested in whether we can determine what can be done proactively with the insurance industry to obviate the need for legislation.

However, if industry can not determine prescriptive measures to ensure that homeowners who have faithfully met their commitments under their insurance polices are made whole than we need to examine remedies to correct such issues.

Thank you. 

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