Trent Lott On The Attack Against Big Insurance
This is an interesting scenario, Trent Lott who lost his Mississippi home in Katrina is having a difficult time with State Farm. And so he is taking up a very public fight in the Senate against the insurance industry.
Obviously, insurance has been a states issue, but it is interesting to see Lott on the attack here. I am a little torn on this specific issue but I think I am eager to see Lott take this all the way, and what role ultimately the federal government will have to play here.
Insurance companies are not necessarily evil, but there is an interesting tension with respect to public policy and urban planning. The one analysis I have heard that seems to make sense is that along the Gulf Coast insurance rates were too low. The consequence to this has been that it has not led to responsible development practices. Much of the wetlands and natural buffers that mediate storm surges have been over developed. This is in no small part due to the fact that insurance premiums have not provided the proper disincentives for reckless sprawl and development. Bailouts and taxpayer mediation of insurance company risk have created some of the conditions that allow too much development in relatively high risk zones. An interesting consequence of Lott’s push might be that it puts sufficient pressure on insurance companies to raise premiums enough to dramatically alter developmental practices along the gulf coast. Regardless of Trent Lott, I suspect insurance companies are already moving this direction in hurricane zones. Ultimately, this could prove to be a boon to the environmental wetlands in the region. This is likely to serve a two fold benefit. More native species habitat, and better long term protection against hurricanes that are virtually guaranteed with the trends in global warming.
In the Northwest we have to be wary of the Lahar threat posed by our volcanic mountains. Avoiding gratuitous development in these Lahar zones will be a crucial component for avoiding catastrophe. And this is why Ron Sims’ proposals for the Orting Bridge makes a lot of sense. However, I would also suggest that the state insurance commission should be on the lookout against insurance premiums that might make for gratuitous development patterns in Lahar zones.
And I suppose this is another argument for opposing the I-933 inititiave on the Washington State ballot that is being fronted by property rights zealots who have no tolerance for growth management policies.
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October 12th, 2006 at 6:13 am
I hate to admit it, because it’s Trent Lott!, but the guy made a seriously positive impression on me when he was on The Daily Show last week. Funny, articulate, and composed, he handled himself very well with the Foley stuff Jon dished and general chatting.
And, I’m glad to see him do this. I don’t think this is a case of improper use of power, I think this is a case of it’s very hard for us to comprehend certain things without the experience – if we want to go Husserlian on it, it’s the deaf man argument and the howness of sound. You can intellectually know the data points on a subject, like insurance companies are a pain in the ass to work with and flip numbers to their advantage, but until you experience them first hand, it’s nearly impossible to truly comprehend the howness of the experience.
Lott is in a unique position, in that he’s privileged, now, in his knowledge, and also his power and connections. He can do things that are right with his power, stemming from the experience of Katrina, and do exactly what he should be doing – represent and protect the people he was elected to serve.
October 13th, 2006 at 4:29 pm
[...] Trent Lott was on The Daily Show recently, holding himself very well against Jon and generally being surprisingly likeable. While on the show, they talked briefly about Katrina and how it affected Lott, who lost his house. Well, over at Desiring Machine, Gordon’s got an interesting post about Lott taking on the insurance companies. It would seem that insurance companies will cover damage from the winds of a hurricane, but not the flooding of a hurricane, and are denying boatloads of people any kind of coverage, claiming the damage was flooding based, and not the Cat-4 winds. And surprise, surprise, they’re upset that someone in power has said “enough” and is doing something about it. [...]
October 16th, 2006 at 7:15 pm
Perhaps there is a modicum of substance in some
of these characters afterall. They may be lost in space
for the most part.