The Insurance Industry's Inherent Conflict of Interest

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NFIP contracts with private insurance companies to sell flood policies backed by the federal government, and it also allows those companies to handle the claims after a disaster. When it comes to adjusting claims for each policy after a hurricane hits, however, the private insurance companies adjust claims for both wind and flood-related property damage.

The General Accounting Office (GAO), the Department of Homeland Security (DHS) Inspector General, and anyone else who has taken an honest look at insurance claims practices after Hurricane Katrina found that the insurance companies have an inherent conflict of interest when allowed to decide whether hurricane damage should be blamed on flooding covered by the federal government or on hurricane winds covered by the insurers themselves. (See Rebecca Mowbray articles in the New Orleans Times-Picayune.)

GAO, et al., also found that NFIP did not perform adequate oversight to prevent insurers from billing NFIP for some losses that should have been covered by the insurers' wind policies.

The insurance industry's inherent conflict of interest is stacked solidly against home and business owners who have faithfully paid premiums for their homeowners' policies and fully expect to be paid for wind-related damage to their properties. Furthermore, this inherent conflict of interest is stacked against the American taxpayers, who subsidize the federal flood insurance policies, also expect to be charged only for flood-related damages.

Furthermore, the dispute over whether wind or flood or come combination of the two damaged or destroyed property unnecessarily delay the recovery for families, businesses, and whole communities.

One policy. One premium. One claims adjuster. Protecting America's home & business owner. Protecting America's taxpayers.

Rep. Taylor's Multiple Peril Insurance Act of 2009 solves this inherent conflict of interest through permitting America's home and business owners to purchase one policy for both types of property insurance coverage.

Coastal America's Homeowner Insurance Crisis

Multiple Peril Insurance Basics
Water/Wind Dispute: The Eye of the Insurance Storm
The Insurance Industry's Inherent Conflict of Interest
Anti-Concurrent Causation: Insurer's Hidden Weapon Against Homeowners
Evidence of Insurers' Defrauding National Flood Insurance Program (NFIP)
Insurers Outsourced Their Cost of Living Expenses to American Taxpayers
Insurance Executives: Pocketing Premiums, Padding Profits, & Passing Out Big Salaries and Bonuses
Insurance Companies Exempt from Nation's Anti Trust Laws

Back to the Multiple Peril Insurance Act Home Page

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