I just watched the live, streaming testimony from the U.S. House Financial Services Committee, which is conducting hearings about Hurricane Katrina and insurance practices. Mississippi Attorney General Jim Hood was among those who testified, and included in his remarks was the statement: "It’s the wind, stupid." My feed was a little slow with the video image, so it’s not clear to me if he was talking to himself or someone else.
One thing is clear from Hood’s testimony, however: Hood is mixing up the anti-concurrent cause clause in State Farm policies with a subsection of the clause, which is a simple flood exclusion, and he is also mixing that up with a different concept entirely — what is the burden of allocation of proof between insurer and insured. You can check out the language of a State Farm policy yourself here in this pdf (see page 4). He appears to be saying that State Farm’s position is that it owes no money for wind damage if a flood subsequently destroys the house. That is incorrect, as I keep pointing out. State Farm is not saying that. These are tough concepts, but wouldn’t you think someone who filed suit against insurers within two weeks after Katrina and conducted a criminal investigation into claims practices would have that straight by now? You can’t cover this stuff up by uttering slogans like "it’s not about the water, it’s about the wind," which is another thing Hood said during his testimony.
He also said that "taxpayers got dumped on" by the insurance companies. Hood apparently was referring to the fact that the National Flood Insurance Program paid out a great deal of money on homes with flood insurance, because Hood also said insurers owe money to the federal flood insurance program. Huh? I thought it was the wind, stupid. Now it’s about the water? How can insurance companies owe money to the flood insurance program when flood insurance covers floods, and homeowners insurance covers wind but not floods. Does that make any sense? Of course it doesn’t.