It’s taken me a while to figure out how to talk about this. I didn’t want to distract from the impact of the actual event…but now that the storm is pretty much behind us, we all need to face a really big problem that it uncovered. There are as many stories as there are people on the island, but I’ve picked one to serve as metaphor for all of us. Once you hear it, I trust you’ll share your own here. If we put in a little effort, maybe we can make some changes for the next victims.
My friend Alex is a professional, hard-working, middle-class small business owner who estimates he has paid over $300,000 in various insurance premiums over the years, and has never made a single claim. He evacuated his downtown Galveston condo when he heard Hurricane Ike was coming. The storm left the building uninhabitable until Thanksgiving. His HOA’s insurance paid for the repairs (and created a “special assessment” to cover huge deductibles), but Alex was displaced for nearly three months. Because he wasn’t required to have personal windstorm insurance, he didn’t receive any housing assistance. Because he didn’t have rising water in his home, his flood insurance wouldn’t pay. Because he HAD insurance, despite the fact that it didn’t pay, FEMA wouldn’t help. In fact, to this day Alex hasn’t receive a dime from anyone. He called his mortgage company right away, and was told that his payments were expected as usual. He explained that his business was closed and he had no income. Eventually, he had to stop making his mortgage payments. He told his lender that he had every intention of making up the difference, but asked them to please consider tacking his past due amounts to the end of his loan so that he stood a chance. They declined. Not until he went into default did they agree to talk to him. By then, he was nearly $20,000 in arrears and they had added attorney’s fees. Oh, and by then, his HOA had hired an attorney to collect back HOA dues and the new assessment!
Meanwhile, Galvestonians who had little to no damage, but did have windstorm insurance, collected $100 a day for their hardship. Renters who had no insurance at all and didn’t even own their homes collected as much as $28,000 for their trouble. Homeowners who had minor water damage collected $150,000 to replace their “antiques” and build new kitchens. Adjustors paid by the claim made staggering bequests. Adjustors paid by the insurance companies denied everything. Who you got was the luck of the draw. While carpetbagging contractors skimmed and ran, insurance companies kept finding ways to avoid paying.
Subtle permutations aside, people who had insurance, but not enough or not the right kind – people like Alex — were just plain out of luck. Thoroughly screwed, in a constant, debilitating battle every day over every little detail, and now in danger of losing their homes on top of everything else. The power company cut off Alex’s power because he didn’t pay the bill for the three months when there was no power to the building and it was uninhabitable. “We estimated because we couldn’t find the meter.” No kidding. Could it be that it washed away and there was NO POWER TO THE BUILDING? They cut him off on Friday and didn’t turn it back on until Monday. They’re still sending threatening letters.
The satellite TV people kept auto-withdrawing from Alex’s checking account — even when their service was null. When he finally realized what they were doing, he called and was told they would credit him three free months. Then they hit his bank account for another three hundred dollars. Ever tried to get money BACK after they’ve taken it?
Ah, yes, and the mail wasn’t delivered at all during this time, so there was no way to know what these creditors were doing!
This is the sort of stuff that makes people go stark-raving mad. And it’s just the tip. Seriously. This is institutionalized torture.
So here’s the question: What if we abolished the insurance industry altogether, then hired their best talent and beefed up/reworked FEMA… maybe gave it a new name like “Catastrophic Loss Assistance and Mitigation (CLAM)”? And what if all us citizens, with the money we save on premiums, were now responsible for our everyday losses. Stolen watch? You buy yourself a new one. Broken antique? Fix it. Water damage on your Brazillian cherry hardwoods? Refinish them yourself. But a burned down home or blown off roof or flooded electrical system — that’s where CLAM would step in. CLAM would be there to keep people safe, but not to upgrade their way of life at everybody else’s expense. CLAM would be fair for a change.
I know the insurance lobby would be apoplectic if they thought this was a real threat. But I also understand that they represent an economic shell game — not only legalized gambling, but mandatory gambling where the house always wins — and I for one feel like I’ve been taken from my home in the dead of night, driven to the desert, and raped for five months.
Alex says when he’s recovered, he’ll tell this story himself. Meanwhile, the final insult, he’s just too damned humiliated to talk about it… to say that he is moments from foreclosure and doesn’t know if he’s going to make it… to say that he can’t pay his everyday bills and must rely on the kindness of friends for nearly everything… to say that he has to endure questioning by five-cent-an-hour call center employees in Bangalore who say, “So if you don’t have any money, how do you buy food to eat?”
Finally, Alex, like most everyone on the island, now has a completely non-existent FICO score, so he will not be able to buy another home anytime soon if he loses this one.
The emotion of humiliation turns out to be the hardest of all.
We elected Barack Obama through grassroots efforts. We can abolish the insurance industry the same way.
What do you think?
Copyright © 2009 Alice Melott
Essays by this author can also be read by joining http://www.facebook.com/alicethewriter.