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Ken Feinberg on the Financial Impact of Sandy

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  • Description

    Former BP Fund Administrator Ken Feinberg on assessing the costs of a disaster.

  • Duration 4:04
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Our former BP fund administrator Ken Feinberg knows -- -- you do about crises.

And then -- -- deal with them afterwards joins us right now.

Can on this is a bad situations that could get worse but invariably officials.

Tried to to deal -- it by telling people.

It's it's just stay indoors to just not -- -- be brave.

Think it's business as -- you go outside what do you gonna get -- just as basic advice.

Well I think that's right -- learned over the years not to second guess.

The people in authority who are trying to.

Protect citizens slightly -- property so you have to go the experts.

You know can -- we hear on.

Estimates the damage I don't know how they ever come up with these figures but.

Invariably they do and they try to -- what they think is what at first is -- -- it was a second astronomical price -- in this case twenty billion dollars -- saying.

For this on I don't know how to come up on that number to you.

Well yes the insurance industry.

And their exports knew exactly what they're doing now remember.

Private insurance companies when they say twenty billion -- -- -- ensuring no individual insurance company.

-- -- anything like that insurance companies.

Lay off insurer so they may ensure somebody.

For a 100000 dollars and then.

80% of that they -- we ensure and the reinsurer we ensures all the way up eleven it's called risk spreading.

And it's very -- common and insurance companies know exactly.

-- what they're doing.

We don't want a lot of policyholder is discovered ten units -- about this before is that what you think your governor or you're not.

Either the deep inside the writing of whatever contract you have is something like.

Yeah you're covered for flooding -- lessons of forces or -- are unattended or unusual once and a lifetime type circumstances.

Would this fit that bill and -- a lot of folks who might be having severe flood damage or or worse.

Be coming up empty getting help from there the from their company.

You're absolutely.

A 100% right.

When you buy insurance people which human nature they think OK I bought insurance arm covered the put everything anything no matter what.

Insurance companies don't do that we saw that -- called in Katrina soon.

All of the wind damage caused by the Howard K in Katrina it was covered.

All all almost virtually all of a flood damage.

Cost sparkle though the dikes that broken that and the the -- and the water spreading public park to trade none of that was covered.

Because insurance completion.

Generally never.

In -- flawed.

Still ensure -- -- but they won't control flawed because what usually means that you know.

Entire communities.

As supposed to this house -- -- -- that -- -- not this does that doesn't and what is true huge risk.

More just general insurance.

But I -- -- -- several a lot of folks -- that they they did get flood insurance but did it doesn't necessarily pertain.

The special circumstances and are not being jaded or cynical about insurance companies.

But it is a way it.

Wiggle out paying unit a lot of the -- Let -- again.

You have to read the policy you have to see what you pay all you know the more you pay you more covered she get there and the lecture paid the last coverage but the important thing to remember here is that what it comes to -- -- Earthquakes floods tidal waves that -- tornado it's.

Insurance companies private insurance companies bid bid in this business for decades they know exactly how to quite -- What to cover what not to cover -- in private insurance is really the foundation.

Over reimbursement of all of the individuals and businesses in this country.

You know I guess though the tends.

Good words of warning for all of us a very -- -- again as always thanks there are you can find.

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