Tom Whitehurst

Where did the good hands go?

What a difference a day makes. A week ago today, we reported that Corpus Christi pays the most in the nation for homeowner insurance - if we're lucky enough to find it before the companies ditch us on account of they don't want to pay mold claims.
   The following day, a news release arrived via e-mail under this headline:
   INSURANCE CREATES SENSE OF SECURITY AND LESSENS ANXIETY
   "In the midst of the rubble caused by the Sept. 11 terrorist attacks," the release said, "insurance - long a bastion of financial stability for families and loved ones - has emerged as the foundation upon which the American Dream will be rebuilt."
   To be fair, the news release was about life insurance, not homeowner's insurance. To be fair, once the news release got past its inevitable shameless sales pitch, it got down to the business of announcing a clearinghouse for information to help relatives of the terror victims who might have claims to file.
   And, to be fair, the insurance companies are indeed bastions. That's what Texans have been calling them, each time a major company announces that it will stop writing homeowner policies in Texas - those bastions!
  
   Anxious and insecure
   Right or wrong, they've left Texans in general and Corpus Christi residents in particular feeling anxious and insecure. And if, as they say, home ownership is the American Dream, it could be argued that the insurance companies undermined its very foundation, literally and figuratively, years before the mold scare - in the mid-1990s, when they decided they didn't want to insure slab foundations any more.
   Recently, the insurance commissioner floated an offer of a $5,000 limit on mold claims, and the three biggest bastions, State Farm, Farmers and Allstate, respond by pulling out. Those three represent more than half of the Texas homeowner insurance market.
   'Abandoning the state'
   None of this was on the mind of the author of that news release, Betsy Bott of the National Association of Insurance and Financial Advisors. She didn't even know about the homeowner insurance situation in Texas. Her focus was on the survivors of terror victims, and Texas consumer advocates who have been critical of the home insurers complimented her organization's efforts.
   "The distinction I see is it looks like the life insurance companies are stepping up to the plate. They're understanding their responsibilities to their customers who have been with them a long, long time," said Rob Schneider, senior staff attorney for the Consumers Union Southwest Regional Office. "On the other hand, you've got the homeowners insurance industry in Texas. A customer has been with the same company for years, and the companies are essentially abandoning the state."
   'Not ducking and hiding'
   While taking issue with the notion that insurance customers derive a sense of security from their insurers, Dan Lambe, executive director of Texas Watch, also praised the insurance association's efforts.
   "These life insurance companies are not ducking and hiding. They're not going to stop writing life insurance in New York because New York is a high risk, like they're doing with homeowners insurance in Corpus Christi."
   Bott and other insurance industry advocates were quick to say there's a difference between life insurers and home insurers, even though Allstate, Farmers and State Farm also sell life insurance. It was pointed out that the life insurance arms are set up separately. It also was pointed out that life insurance is a matter of choice, while home insurance is a requirement for a mortgage loan.
   Waived exemptions
   Also, while the proposed $5,000 mold limit wasn't enough for those three bastions, it was noted that the life insurers have waived the exemption for acts of war and terrorism.
   It might also be noted that if every Sept. 11 terror victim had life insurance, that would be 7,000 policy payoffs, tops, while the mold claims in Corpus Christi alone, though unknown, is said to number in the thousands. The numbers don't disfavor the life insurers to the extent that they disfavor the home insurers.
   Bottom line? If you're related to a terror victim and you need information about a potential insurance claim, go to www.naifa.org or call 202-464-5000. But if you're looking for the foundation on which the American Dream is built, take a gander in the mirror. You won't find it anywhere else.
  
  

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