The $ Cost of Katrina.

When I first blogged about Katrina, I mentioned that my second thought (after the loss of life) was how this was going to affect the national debt. Well since then I’ve come to realize that the burden of the hurricane damaged might end up being paid by the poor and by the nice instead by the government and big business.

Yesterday I saw on CNN that several insurance companies have decided NOT to pay out the victims of Katrina. Now insurance is ‘betting’ but all dressed up. Basically, you pay the insurance company x amount a month in case you have an accident. You figure that if something bad happens, you’ve paid into a system and the insurance company will pay your bills. On the other side, insurance companies hire lots of bean counters and like Vegas make sure that odds are in their favor. The companies set your rates based on all sorts of math and work the math in their favor, like a gambling joint in Vegas.
Now with the odds in their favor, you expect insurance companies to ‘play fair’. You’ve given them money, and if nothing happened to you the companies get to keep the money; so you expect them to pay up when something does happen.
That’s not what’s happening in LA., the insurance companies are saying that the damage was ‘flood’ damage- as the damage occurred by water after the levees broke. And most of the people didn’t have flood damage- as that’s an ‘extra’ that few poor people can afford and besides that could be considered a ‘sucker’s bet’, as who would expect a house in New Orleans to be ‘flooded’?
This made my stomach churn more as I heard that the state was going to sue to get the money back. Now I’m all for people suing to get their money back, however with tort reform and lawyer fees, I figure the people who are actually hurting aren’t going to get nearly enough of the money they need.

This brings me to another interesting tidbit that I found on the internet, the idea that our government and not the American people should be helping the victims of Katrina. The Red Cross should be helping countries that can’t afford to help themselves; they shouldn’t need to help America (one of the richest countries ever). Rather then ask the American people for handouts, our government should be rolling back tax cuts. Rather then ask ‘average’ Americans to ‘share the burden’ of the victims- Red Cross( and news media) should be asking companies like Exxon to step up. I mention Exxon as they have just posted the best quarter EVER. Exxon has done better in this quarter then any company has EVER done in the history of America. You’d think after posting the best quarter EVER, they’d be able to spare a ½ billion or so for others who aren’t doing so well.