NBC's Williams Ignores Heavy Cost of $2.5-million 'Big Victory' for Katrina Victims
One manâ€™s punitive damages could mean distress for an industry.
But to one news anchor, it was a â€śvictoryâ€ť for the little guy.
NBCâ€™s Brian Williams quickly breezed through news of a court ruling in Mississippi pertaining to Hurricane Katrina insurance claims. But unlike coverage of the case in the Associated Press and The New York Times, the â€śNightly Newsâ€ť anchor cast the ruling only as a victory for storm damage victims, without looking at how it could harm the insurance industry or gum up courts by encouraging lawsuits.
Williams told viewers of the January 11 program about â€śA big legal victory today for a Biloxi, Miss., couple who sued State Farm Insurance for refusing to payâ€ť their Hurricane Katrina damage claim. The ruling could prove helpful to â€śhundreds of other victims in that regionâ€ť who could â€śbenefit as a result,â€ť the anchor insisted. All told, Norman and Genevieve Broussard walked out of court with nearly $3 million, Williams added.
But Williams failed to tell viewers that most of that award was $2.5 million in punitive damages, or that the Broussards â€śwanted State Farm to pay for the full insured value of their home plus $5 million in punitive damages,â€ť as Garry Mitchell of the Associated Press reported on January 11 (a story which appeared in The Washington Post the following day).
Even pared in half from their initial request, the punitive damages award would be â€śdistressingâ€ť for insurers, economist Robert Hartwig of the Insurance Information Institute (III) told Mitchell. â€śIt adds even more cost and more uncertainty to the other problems that already exist in the Mississippi homeowners insurance market,â€ť said Hartwig.
Whatâ€™s more, the â€śjury decision could also lead policyholders to conclude that instead of settlingâ€ť out of court that â€śthey should hold out in the hope that a jury would award them millions of dollars in punitive damages,â€ť New York Times reporter Joseph Treaster wrote in the January 12 paper, citing Philadelphia attorney Randy Maniloff.
Also missing from Williamsâ€™ report was the fact that the vast majority of insurance claims from the devastating hurricane have already been settled. Around the one-year anniversary of Hurricane Katrina on Aug. 22, 2006, the Insurance Information Institute reported that â€śnearly 95 percent of homeowners insurance claimsâ€ť from Katrina had been settled. Of those settled claims, â€ś334,800 or 94.3 percentâ€ť of the Mississippi cases were settled, resulting in $5.2 billion flowing from insurance companies to Magnolia State policy holders.
The Business & Media Institute has previously recorded the mediaâ€™s one-sided and inaccurate presentation of the insurance industry in the wake of Hurricane Katrina, particularly the mediaâ€™s complaint of â€śrecordâ€ť profits and overlooking consumersâ€™ need for separate flood insurance.