In Case You Missed It..

There was an article well worth reading in Friday's Opinion Journal, from WSJ editorial board member Kimberly Strassel. Since the GOP returned him to a leadership position after last year's election debacle, Mississippi Senator Trent Lott has been on a crusade that Harry Reid and Chuck Schumer would certainly approve of.

Like thousands of Mississippians, Mr. Lott lost a home when Hurricane Katrina struck the Gulf Coast in August 2005. And, because his insurance company has refused to pay up in a timely manner, Mr. Lott is going after the big insurers. He enlisted celebrated trial lawyer Dickie Scruggs in a high-profile lawsuit against his insurance company, State Farm. Mr. Scruggs, who made a fortune suing tobacco companies, also happens to be Trent Lott's brother-in-law. Lott also made a call to the head of an insurance industry lobbying group, vowing to use his next term to "bring down State Farm and the entire industry, through all means available to him," including legislation designed to harm property and casualty insurers.

The central issue in the Lott case is the same one facing many along the Gulf Coast. Standard property owner policies--like the one Senator Lott had on his waterfront home in Pascagoula--pay for wind damage, but not losses caused by flooding. Coverage for that type of water damage is provided through federally-subsidized flood insurance. Lott had a $350,000 flood insurance policy on his Pascagoula property, and presumably received full payment for damages. But apparently, that isn't enough for the Senator from Mississippi.

As a part-time resident of the Magnolia State (and property owner), I have great empathy for those who lost family members and homes in the storm. And, in some cases, I believe the insurance companies are playing fast-and-loose with policy holders, attempting to ascribe obvious wind damage to the storm surge, and shift their liabilities to the taxpayers.

But, as Ms. Strassel points out, Mr. Lott's crusade against big insurance looks more like a personal vendetta, and there's a real danger in that approach. A lethal combination of lawsuits and legislative action will likely force more insurers to quit writing policies in coastal areas, or get out of the business altogether. And what happens then? Senator Lott and his allies have a solution for that problem, too. Earlier this month, Mississippi Congressman Gene Taylor (who also lost a house in the storm) introduced legislation that would expand federal flood insurance to cover other types of hurricane damage as well.

If that happens, taxpayers could easily wind up footing the entire bill for future storms, and remove any requirements for individual responsibility. That, in turn, will lead to more over-development in vulnerable coastal areas, and inevitable fraud and abuse when claims are actually filed. Under the Lott-Taylor plan, the cost for future hurricanes could make the tab for Katrina ($110 billion and counting) seem positively cheap.