Leave it to insurance companies to waste no time finding a way to let themselves off the hook. At ConsumerWatchdog.org we are already hearing from Katrina survivors who are being told that their insurance won't cover them because "it was a flood not a hurricane" that caused the damage and they (along with about 60% of folks in New Orleans and the Gulf region) don't have flood insurance.
Saying that it wasn't Hurricane Katrina but the flood that destroyed folks' homes is like saying the murderer didn't kill anyone...the bullet did.
Would there have been a storm surge in Biloxi if there was no hurricane? Would the levees have broken if a category three rather than a four or five stormed through New Orleans? Everybody knows that HURRICANE Katrina did the damage.
There is precedent out there that says that if the predominating or initiating cause of the loss is covered by an insurance policy, then the insurer is responisble for the damage. And most storm survivors did carry hurricane insurance and they ought to be covered. Unfortunately, it already looks like these insurers are going to make policyholders battle it out in court rather than come to the table and help put people's lives back together by honoring the insurance that they've paid for.
Note: We've set up a complaint page for Katrina survivors to report what their insurer is telling them and the page has tips for dealing with the claims process.