In 2005, Louisiana and Mississippi, and to some extent Alabama, were victimized by the most notorious Atlantic hurricane in recent memory. New Orleans is featured in the minds of most Americans, tied to political fortunes and to a myriad of insurance claims that were supposed to pay off, but for various reasons, some of them controversial, never did. The storm, given a female name now notorious, was especially blamed for creating havoc in and around New Orleans – much of it never reimbursed to policyholders.
That said, natural disasters, and accidents happen. It’s never pleasant when such events occur, but when they do, we expect insurance companies to sort out the damage and compensate policyholders. Unfortunately, with Katrina, wind damage versus flood damage was never really sorted out. As an additional factor, the sheer numbers of the claims and their monetary magnitude probably seemed overwhelming to insurance companies. Some tough choices undoubtedly had to be made.
The Katrina disaster did highlight the fact that sometimes neatly-defined categories of loss are akin to an endangered species. In some cases, if attorneys equipped to lend expertise in insurance disputes are brought in, it’s essential that they know a lot about dispute management.
Insurance disputes can encompass a wide range of variables. Disputes over coverage, benefits, liability and negligence don’t require a hurricane to become part of the conversation. Such disputes embroil insurance companies and their policyholders every day. But one thing for certain: Acrimonious court battles will exacerbate tensions and strain financial resources in ways never imagined. Litigation involving insurance disputes can be dragged out over years – prior to a resolution – even in the most seemingly mundane of conflicts.
Mediation is frequently employed to mitigate such conflicts, to nip them in the bud, so to speak. If an attorney skilled in such mediation is involved, parties can often achieve a form of resolution, perhaps equal to or superior to what might be achieved in a courtroom, only with a lot less expense, a certain timeliness, and a lot less frustration.
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