Insurance: Stormy Settlement

“I came into this world with nothing,” says Herman W. Ryals, a retired civil service worker, “and it looks as though that’s the way I’m going to leave it.” His lament is becoming familiar among the thousands of Gulf Coast victims of last August’s Hurricane Camille. Nothing remains of the crippled Ryals’ modest frame home near the beach at Gulfport, Miss., and he and his wife now live in a leased trailer on their hurricane-stripped lot. His insurance company offered to pay only 25% of his claim, says Ryals, so he has hired a lawyer to sue for more. That may take considerable time, and in the interim the lender is threatening to foreclose the mortgage that covered his lot and vanished home.

Tents on the Lawns. By Weather Bureau reckoning, Camille was the most violent storm ever to strike the U.S. The hurricane’s fury—210-m.p.h. winds and waves up to 22 ft. high—fell most savagely upon the Delta parish of Plaquemines, La., and a 35-mile shorefront strip of Mississippi from Pascagoula to Waveland. Both areas remain a jumble of devastation. Hundreds of homes, motels and other business establishments stand roofless or without walls. Uprooted trees, torn chunks of pavement and twisted iron fences bestrew the roadsides. Some families are living in tents on their front lawns.

Little reconstruction has begun because many insurance companies have been slow at settling the larger damage claims. Most property insurance covered wind, rain, or lightning damage, but not destruction caused by high tides or waves. Former homeowners and businessmen are caught between the precise wording of their insurance policies and the difficulty of proving that wind caused most of the damage to their property before high water floated the debris away. “Many of my people saw their houses blown away, but the insurance companies say this isn’t so,” says Chalin Perez, president of the Plaquemines police jury, the parish’s governing body. Perez, a New Orleans attorney, is forming a community legal group to bring court action.

In the Pockets. Early this month, a grand jury in Jackson, Miss., charged that the state insurance commission is “in the pockets of the insurance companies.” The jurors added: “The people of Mississippi can only expect to be skinned by these companies.” Last week a grand jury at Pascagoula handed in another critical report. Most of the controversy centers around Commission Member Erskine Wells, a lawyer whose firm represents many insurance firms, and State Insurance Commissioner Walter Dell Davis, an ex-officio member of the commission, who has been accused of being too cozy with insurers. In the wake of the storm, the commission hastily approved a 50% rate increase along the Gulf. Last week public outcry and political pressure prompted the commission to postpone the rate rise until after it holds another hearing. Considering the $135 million in storm losses they face, insurance companies may be justified in raising their rates. The delays in claim settlements, however, have left a bitter residue of ill will among countless citizens of Mississippi and Louisiana.