Largest insurer to pull out of New Orleans

[Balta1701]

So, if the multitude of reports coming out about the inexcusably poor state of the repair of the Levees around New Orleans didn't get enough people's attention, maybe this will. Citing the state of the levee repairs, the largest insurer in Louisiana will, starting next year, stop offering property insurance of any sort to the city of New Orleans.

 

St. Paul Travelers Cos. Inc., Louisiana's largest commercial insurance provider, plans to cancel all its commercial property policies in the New Orleans area next year, sparking fears that other insurers will follow and slow the region's economic recovery.

 

While the St. Paul, Minn., company refused to say how many commercial policies will be affected or specify where the cuts will be in South Louisiana, two insurance brokers who were briefed by the company this week say Travelers will not renew any property insurance for businesses in Orleans, Jefferson, Plaquemines, St. Bernard and eastern St. Tammany parishes. Cuts will also affect individual businesses in other parts of South Louisiana, including St. Charles and St. John the Baptist parishes.

 

"I said, 'May I tell anybody who asks that Travelers is withdrawing from the commercial property insurance market in southeast Louisiana?' " said Anderson Baker, president of the New Orleans agency Gillis, Ellis & Baker, who met with the company Wednesday. "The answer was, 'Yes.' "

 

Travelers spokeswoman Jennifer Wislocki said the company has "a high concentration of commercial policies in the hurricane-prone areas of Louisiana" and will not renew many commercial policies when they expire.

 

...

State Insurance Commissioner Jim Donelon, who was tipped off about Travelers' plans Wednesday night by the Business Council of New Orleans and the River Region, said he was stunned by the news. When he met with Travelers on Thursday, he was equally stunned by the stated reason for the company's retrenchment.

 

"They cited the state of the rebuilding of our levee system as the primary reason for their decision," Donelon said.

To those who saw Katrina and said that it's time to abandon New Orleans, this may be the first sign of that actually happening. The government simply has not been remotely up to the task of rebuilding that levee system in terms of money, leadership, or resources.

 

We caught a monster break in terms of having this be an El Nino year, which dramatically reduced the risk to New Orleans by preventing most of the hurricane-forming conditions from existing over the Atlantic. The odds though are that next year, the weather patterns will go right back to the 04-05 state, and that city will be right back in the crosshairs, and it will have virtually wasted a free year of preparation time. This is merely a symptom.

[NUKE_CLEVELAND]

Can you blame them?

[Balta1701]

Can you blame them?

Not in the least. Which, given the fact that the people reconstructing the levees were given a full free year with no hurricane threats by El Nino, is absolutely pathetic.

[NUKE_CLEVELAND]

Not in the least. Which, given the fact that the people reconstructing the levees were given a full free year with no hurricane threats by El Nino, is absolutely pathetic.

 

 

Do you or anyone else know exactly what the status is down there?

[Balta1701]

Do you or anyone else know exactly what the status is down there?

There have been a wide variety of reports put out monitoring the status of the levee repairs down there throughout the year, many of which I'll bet played a key role in this company's decision.

 

CBS

The Bush administration issued guidelines for deciding how to protect Louisiana from the most dangerous hurricanes - plans that state officials said ignore specific fixes that could begin quickly.

 

The much-awaited report, developed by the U.S. Army Corps of Engineers, marked the first step in two years of planning how to rebuild New Orleans' levees, bolster Louisiana's coastline and develop other programs to control flooding from Category 5 storms.

 

But five specific recommendations Louisiana Governor Kathleen Blanco, a Democrat, described as urgently needed to protect the state had been stripped out of the Corps' proposal since a draft was circulated last month.

 

Instead, Corps officials said they would put off embracing any particular plans to avoid uncoordinated or incomplete safeguards during the process. The rebuilding could take over a decade.

 

WaPo

The Bush administration said yesterday that the cost of rebuilding New Orleans's levees to federal standards has nearly tripled to $10 billion and that there may not be enough money to fully protect the entire region.

 

Donald E. Powell, the administration's rebuilding coordinator, said some areas may be left without the protection of levees strong enough to meet requirements of the national flood insurance program. Those areas probably would face enormous obstacles in attracting home buyers and investors willing to build there.

 

The news represents a shift for the administration; President Bush had pledged in the weeks after Hurricane Katrina to rebuild New Orleans "higher and better." Now, some areas may lose out as they compete for levee protection. Powell's announcement, in a conference call with reporters, prompted denunciations from state and local officials who said the federal government is reneging on promises to rebuild the entire region.

 

AP

The federal agency responsible for maintaining the city’s levees is dysfunctional and needs to be overhauled to prevent future catastrophic flooding, scientists said in a report released Monday.

 

The group also said routine underfunding of the city’s levee system was to blame for flooding during Hurricane Katrina.

 

“You tend to get what you pay for,” Dave Rogers, a member of the team of academics who extensively studied the system, said during a news conference.

 

PBS Interview, levee repairs may be inadequate.

 

Fox

Despite aggressive efforts to repair the New Orleans levee system following the destruction of Hurricane Katrina, it isn't clear yet whether it could withstand a hurricane with heavy storm surge this year, the head of the Army Corps of Engineers conceded Saturday.

 

Lt. Gen. Carl Strock said the agency was carefully tracking Hurricane Ernesto, which was in the Caribbean and projected to reach hurricane strength Tuesday. It was on track to enter the Gulf of Mexico, but it too early to tell whether it would strike the southern United States.

 

Strock was confident the Corps had done all it could to repair and reinforce 220 miles of levee walls, but he said many variables would determine whether the levees could withstand a major hurricane striking near New Orleans, as Katrina did Aug. 29, 2005.

Etc.

Edited December 4, 2006 by Balta1701

[ptatc]

This isn't surprising. My wife is an excutive for an insurance company and used to work for St Paul. She said that St. Paul is involved in a lawsuit to determine the cause of the flooding. If it's ruled a flood it's the government's repsosiblity for those who had governement flood insurance. If it's ruled wind damage, the hurricane causing the water to back up then cause the flood, St. Paul could lose around a billion (not including the re-insurance).

 

They are backing out because they don't want to do it again.

[YASNY]

I wouldn't worry so much about it, Balta. As soon as the Democrats take over congress and gain control of the nation's purse strings, everything should be alright.

[southsider2k5]

As usual, the free market succeed where the government falls on its face.

[Texsox]

I wouldn't worry so much about it, Balta. As soon as the Democrats take over congress and gain control of the nation's purse strings, everything should be alright.

 

LOL.