TRENT LOTT, ACTING ACCORDING TO TYPE:
One big question when Democrats took over Congress was which industry would be first to feel the new majority’s populist rage. Oil? Pharma? Banks? Corporate America just got its answer, direct from the angriest man to have been empowered in the past election: Republican Sen. Trent Lott.
The Mississippian was “infuriated” by the insurance industry’s refusal to shell out for certain Katrina claims, most notably his own. So Mr. Lott is spearheading a ferocious campaign of political revenge that would make even Henry Waxman envious–replete with investigations, voracious trial lawyers, ambitious state attorneys general and threats of punitive federal legislation. And like most personal grievances that get morphed into policy battles, it’s ending badly for consumers.
Mr. Lott’s beachfront property in Pascagoula–one of three homes he owned–was swept away entirely by Hurricane Katrina’s waters. Like many Gulf Coast residents, Mr. Lott was soon reminded by his insurer, State Farm, that his policy only covered wind damage–not flood damage. The senator surely knew that, which is why he’d also purchased federal flood insurance. According to his flood policy that was in effect when Katrina hit, he was covered up to $350,000 in flood damages, and he presumably collected in full. (Sen. Lott’s office didn’t return my call.) . . .
For his part, Mr. Lott has been busy cranking up the pressure in Washington. Not that he didn’t give fair warning. In July of last year, he placed a call to Chuck Chamness, the CEO of the National Association of Mutual Insurance Companies, to let the industry know what was coming. Mr. Chamness later sent a letter to Mr. Lott, summing up the call. The key passage: “Your comment that you will dedicate your next term of office to ‘bringing down State Farm and the industry’ through all means available to you, including legislation designed to harm the property/casualty insurance industry, was very unsettling, to say the least.”
Nice to know that he’s got his priorities in order. Sheesh.