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HUMAN NATURE SEEMS to make people focus on exceptions, rather than the rule. This is true of insurance claims, as we've seen since Hurricane Katrina devastated the Gulf Coast.
More than 90% of the hundreds of thousands of insured losses from that awful storm have been resolved, according to industry statistics. Still, the fraction of open claims has grabbed headlines and prompted investigations of insurers' claims-handling practices.
Our Spotlight report, beginning on page 11, shows most insurers go to great lengths to resolve claims. Lexington Insurance Co. used alternative methods to put money into policyholders' hands in the days after Katrina. Zurich Financial Services Group started alternative dispute resolution to settle claims and avoid costly litigation. In a flood unrelated to Katrina, FM Global used helicopters to rescue business equipment. These are just a few examples.
Disasters don't discriminate between policyholders and those that serve them. Many Katrina victims work in the insurance industry.
Undoubtedly, some insurers drag their feet, and those deserve to be investigated. But critics of the insurance sector ought to look at the big picture before painting the industry with a broad brush.