Monday, December 22, 2008

Company says smoke that killed 3 was 'pollution'

From the Houston Chronicle:

An insurance company with a potential $25 million liability from a 2007 Houston office fire is claiming smoke that killed three people was "pollution" and surviving families shouldn't be compensated for their losses since the deaths were not caused directly by the actual flames.

Great American Insurance Company is arguing in a Houston federal court that the section of the insurance policy that excludes payments for pollution — like discharges or seepage that require cleanup — would also exclude payouts for damages, including deaths, caused by smoke, or pollution, that results from a fire.

"This is shocking. It's an extraordinary effort by an insurance company to avoid paying on a contract for insurance," said Randy Sorrels, who represents several family members in wrongful death lawsuits from the fire in a six-story atrium building on the North Loop.

Great American has asked U.S. District Judge Lee Rosenthal to find that the deaths caused by the smoke, fumes and soot from the March 2007 fire set by a nurse working in the building will not be covered by the policy because there is a specific exclusion for pollution and it mentions smoke, fumes and soot.

More here.

Pretty amazing, right? I mean, the total bullshit legal strategy Great American is using to wiggle out of what it owes. It's like, how could anyone be so obviously cruel? Of course, this makes complete sense from the perspective of the insurance industry. That is, ideally, insurance companies would never have to pay out claims at all. You don't get rich making handouts. That's why insurance contracts almost always favor the insurance company in virtually all situations. The idea is to get you to pay in with their never having to pay out.

What's cool is when you have insurance companies suing each other. But I digress.

This Great American gambit will most likely fail--after all, smoke inhalation is pretty much considered by everybody to be one of the main causes of death by fire; indeed, smoke is pretty much considered by everybody to be an actual part of fire. Bad argument. And bad press if they win. Generally these things work themselves out, and insurance ends up being something that benefits both buyer and seller.

Except in the case of health insurance.

With health insurance, you have the same kind of financial incentives as with other insurance. Health insurers want to take in as much as possible, while paying out as little as possible, only covering people who stand to actually do that. You know, healthy people, people who don't really need insurance. And that leaves the people who actually need insurance out in the cold. Fucked, even.

It's long past time to get rid of these crazy financial incentives that keep sick people from seeing doctors. That is, the insurance industry has absolutely no business dealing with health care. I bet you fifty bucks Obama doesn't have the balls to kick the bastards out.