Don't Fear the Reaper - State Farm and the Lessons of Katrina

Don't Fear the Reaper--this is the name of a song by Blue Oyster Cult. This group's songs had very few lyrics, and this song exemplifies why. It really makes little sense except for those whose thoughts have been somehow chemically altered.

I hate that song.

When the winds started to blow from Katrina, I was watching on TV. As we watched the winds blow homes and buildings off their foundations, I told my wife that most of the claims would be denied. The reason: most dwellings are covered for wind damage but not flood damage. If there is a combination, some insurers would choose to deny if any water hits an insured dwelling.

The same thing happened after the 9/11 attacks with life insurance. Some insurers called the attacks an "act of war" and therefore not covered.

State Farm got tagged this week trying to pull this wind/flood combination. But this is a cautionary tale for everyone who owns anything - a home, a business, a car...

Read your policy!! If you live in a flood zone, buy flood insurance. If you live in a hurricane or tornado area, make sure there is no doubt that you will be covered before it happens.

I had a hailstorm hit my neighborhood a few years back. All the homes were covered except those insured by my company. The insurance company told us that hail had hit our house, and that we had hail damage, but the hail that hit our house wasn't the hail that caused the damage. They said it must have been the hail storm that occurred about two years, which of course was outside the reporting time for any claim, and therefore not covered.

We fought and fought and fought them. In a fortuitous turn of events, though, just as we were about to take them to court, another storm came through and left no doubt as to the damage incurred.

If you can't afford to lose something, make sure you know what's certain and what isn't certain.

If not, you will have to let the insurance company decide.

Oh yeah, my insurance company only paid for half of the roof!!

"We can be like they are (don't fear the reaper)..."