Slabbed. One of the first things anybody could notice from Hurricane Katrina’s path along the Mississippi Coast was the number of structures that were a total loss. After pulling off the debris, those structures were noted as “slabbed.”
While social media journalism was still in its infancy, one such regional reporting effort about the plight of Hurricane Katrina policyholders was “Slabbed.” In Slabbed Keeps Pounding on Policy Coverage Problems and the Litigation Discovery Policy in Southern Mississippi, I wrote about Slabbed and its important role to those impacted by Hurricane Katrina and suffering through the hardships of insurance litigation:
Coastal Mississippi policyholders are well served by the daily and in-depth reporting by Slabbed. Writing daily for this blog is time consuming; posting two to five in-depth discussions each day must border on a full-time job. Lately, Slabbed’s posts have highlighted two important issues regarding insurance coverage and insurance coverage litigation in Mississippi. One, if insurance companies want to pay nothing under the all-risk policy because of the anti-concurrent causation clause, a new form policy is needed–even if the government has to sponsor it. Two, the insurance industry is winning the lawsuits in Southern Mississippi because they are winning the discovery battle over key information.
…
I simply do not have time to read Slabbed everyday. Yet, I have no hesitation in suggesting that many can learn a great deal from the posts. The ideas are exceedingly original. I am certain that those in the insurance industry dislike Slabbed because it does have a tendency to demonize the industry and those supporting their status quo. Imagine if all your best friends, neighbors, and family had to endure financial ruin caused by insurance not paying following a devastating catastrophe like Hurricane Katrina. I imagine your rhetoric towards insurers and their agents would not be very complimentary either.
Traveling in the fire-stricken areas of the Los Angeles wildfires also has “slabbed’ total loss structures, which seem to go on forever. It is simply hard to believe. I thought that if I ever used my California Bar license in a catastrophe situation, it would be in response to an earthquake and not an urban wildfire that destroyed over 15,000 structures.
What is the one issue 95% of all these poor folks suffered as a result of a total loss, leaving them with only a slab? They are underinsured for the structure risk. The breadth and devastating consequences of the underinsurance plague do not fully emerge until these mass total loss situations occur.
Literally days before the Los Angeles blazes started, I warned about this looming crisis – now a reality in California – in The Looming Homeownership Crisis: A Ticking Time Bomb of Underinsurance, Insurance Premiums, Taxes, Systemic Losses, and Owners Not Able to Pay for Costs of Ownership. Now, we have a steady stream of wildfire clients coming to us with issues regarding underinsurance.
Hurricane Katrina is obviously on my mind as its 20th anniversary is upon us. We did some very important work following that storm, which I am very proud of. Now, I am spending a lot of my time working with our firm’s California-based attorneys on one of the most novel events in our lifetime. Who honestly would think of 15,000 structures burning to the ground in Los Angeles in 2025? Mass urban fires were over in the 19th century until recently.
The problem is that we are not learning enough lessons to prevent many of the same issues from repeating themselves. It is almost as if the insurance industry says, “Well, that’s just the way it is” without trying to devise a method to fix the insurance product and make it work better for everyone.
One year ago, in “Why Are Policyholders So Frequently Underinsured in the Event of a Total Loss? What Can Fix the Underinsurance Problem?” I wrote about suggestions experts made on how to correct the underinsurance problem. I noted the important role of insurance commissioners in doing something since the insurance industry seems to want to do nothing about this significant issue:
Every insurance regulator and insurance commissioner should thoroughly read this work and take action. The underinsurance problem is profound and impacts not only policyholders but also raises its ugly head when co-insurance is considered and raised during the claims process. It arises in litigation when policyholders ask me what responsibility insurers and insurance agents have when total loss structures are not close to having enough insurance coverage for rebuilding. Underinsurance is simply not good for anybody.
A lot has changed in 20 years, and much is still needlessly the same.
Thought For The Day
“Although the world is full of suffering, it is also full of the overcoming of it.”
—Helen Keller