Natural Disaster of Hurricane Katrina

Essay by TaplockUniversity, Master'sA, March 2009

download word file, 5 pages 5.0

Ethical Dilemma: Natural Disaster of Hurricane Katrina-Insurance Companies Deny ClaimsHurricane Katrina was a hurricane like no other in our country’s history. Its furystruck the gulf coast on August 29, 2005 and as with 9/11, we were inundated withimages from television and newspapers twenty-four hours a day, seven days a week. We were first hand witnesses to the human suffering of people escaping to their roof tops, clinging to tree branches and bodies floating in the flood waters. There was great destruction not just to property but also to the lives of those who inhabited the Gulf Coast region. As with 9/11, there has also been a great impact on the insurance industry. Theessentialness of insurance is to allow the rebuilding of destroyed homes, businesses, and communities and to allow people to get back to living their lives once again. In order to cope with the effects of catastrophes the industry had to “come up with mechanisms that would preserve the nation’s insurance industry in the aftermath of natural or man-madecatastrophes.”

(Tuckey, 2006)There are many issues that the insurance industry faces since this natural disaster occurred. The impact of Katrina has been substantial and widespread and has affected the customer in a negative fashion due to the frustration of filing claims and fighting with insurance companies. Will the total impact prove detrimental to the industry as a whole? These and many other issues need to be explored in order to gain complete insight into what exactly happened that fateful day and what will the future bring to the industry.

A succession of catastrophes can raise the specter that insolvency may become a possibility. “The regulatory goal of ensuring solvency, however, conflicts with the goal of ensuring affordable and available coverage.” (Berliet, 2006) With such large amounts of money being paid out...