Ken Shepherd of the Business & Media Institute argues that CNN’s Ali Velshi is unfairly criticizing insurance companies in coverage about the industry as part of reporting on the one-year anniversary of Hurricane Katrina.
“‘Allstate says it won’t comment on specific cases,’ he noted after highlighting one couple’s gripes about the company.
“In fact, many companies refuse to comment to the media about cases under litigation or threat of litigation, and Velshi should know it. Instead, the business reporter could have sought comment from the American Insurance Association (AIA) or the Insurance Information Institute (III) for industry input in his story.
“Indeed, that’s what he did two days earlier, when Velshi filed a similarly slanted story about damage to one Cecil Tillman’s property in his first installment of ‘Red Tape and Rubble.’ In his August 28 story, Velshi noted that ‘we wanted to ask Nationwide about Tillman’s case, but the firm wouldn’t comment, so we went to the Insurance Information Institute, the industry’s public relations arm.’
“What’s more, while Velshi’s featured hurricane victims may have legitimate complaints, the CNN reporter failed to note that these cases in the tiny minority of insurance claims, according to the III. The organization reported on August 22 that 95 percent of claims from Katrina have been finalized ‘and the vast majority’ of those dealing with insurance claims in Mississippi and Louisiana ‘are satisfied with their insurance company.'”
Read more here. As someone who spent a decade covering the insurance industry, it’s not an easy beat, and there are plenty of negative stories to write. But fairness should always come first.
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Indeed fairness should come first. I haven't seen Velshi's reports, so perhaps I am violating that rule -- maybe this criticism is unfair to him. Here it is, anyway: Any reporter covering insurance-claim issues should read the policies in question. Once you become accustomed to the wording of insurance policies, it's usually quite apparent what the policy says and means.
Then it's a matter of asking the subject of the story whether he or she understands the clear meaning of the policy. I realize that there are ignorant and unsophisticated policyholders, as well as those with limited English. Perhaps they are unable or unwilling to understand their policies. But how much is the insurance company to blame for that?
Look at the Nationwide case. The policy clearly stated that it didn't cover storm surge. I'm sorry that the policyholder misinterpreted the insurance agent's explanation of what the policy covered. But the policyholder spoke English, and he could have read the policy himself and asked his agent a few questions. Then he would have known that he needed to decide whether to buy flood insurance.
It's false populism to blame insurance companies for problems caused by policyholders who neglect to find out exactly what their policies cover.