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The Next Shock For Texans: Insurance Often Doesn’t Cover Floods

September 2, 2017 Tyler Durden 0

A complete assessment of the property damage wrought by Hurricane Harvey will take weeks, if not months, to deliver. But as the first disaster victims return to their homes, some are being forced to confront an unfortunate reality: Gaps in their homeowners’ insurance that will leave them on the hook for thousands of dollars’ worth of damages.

According to analytics firm CoreLogic, hundreds of thousands of affected residents in Texas and Louisiana aren’t insured for flooding damage. The firm estimated that residential flooding has caused $25 billion to $37 billion in damage spread across 70 counties in Texas and Louisiana hit by Harvey. Of that, about 70%—or $18 billion to $27 billion—is uninsured.

Scientists have confirmed that Harvey caused a “1-in-1,000-year flood” and that the total cost of property damage and lost productivity could be as high as $190 billion.

One homeowner who spoke with the Wall Street Journal said the first thing she did when she returned to her home was check the details of her insurance policy.

“Among them is Andrea Womack, a 38-year-old mother of four.


The carpet and some clothing in her one-story house in Houston’s Settegast neighborhood were damaged by water. On Friday morning, Ms. Womack was waiting for an insurance company representative to come by and go through what was covered.


‘I signed up for insurance a while back, but on my papers it says it does not cover flood insurance. So I’m not sure’ what will be covered, she said.”

The Federal government’s flood-insurance program has written 250,000 policies for Houston residents, compared with 1.7 million housing units that may’ve experienced flood damage, according to WSJ.

“Overall, households and businesses in Harris County, which includes Houston, held roughly 249,000 federal flood insurance policies as of June 30, according to the Federal Emergency Management Agency. There are about 1.7 million housing units in the county.”

The reason is simple: Even in flood-prone areas, many homeowners don’t read the fine print of their insurance policies until disaster strikes.

“Many homeowners never examine details of the policies they buy, and it is only after a flood they learn the basics: Standard homeowners’ policies provide payouts for damage from wind, fire, fallen trees and other storm-related events—but not flooding. For that, people generally need to buy separate policies from the U.S. government, through its nearly 50-year-old National Flood Insurance Program.”

In an ironic twist, homeowners with mortgage debt might be better off than their peers who own their homes outright.

“Those homeowners who do have flood insurance are likely those whose mortgage lenders require it, said Etti Baranoff, an associate professor of insurance at Virginia Commonwealth University.


‘The mortgage company checks if your home is in a flood zone or not, and they’ll make you take’ a policy out if so, she said.”

But even those who bought flood insurance from the federal government may not receive enough to cover all their property damage, according to WSJ. These policies pay out a maximum $250,000 for rebuilding and $100,000 for personal possessions.

Some homeowners are putting the cleanup on hold until they’ve spoken to an insurance agent.

“’That’s kind of storm Houstonians judge everything by,’ said Mr. Truss, 36 years old. ‘It did not flood during Allison.’


Even so, the couple’s bank still required them to get a federal flood policy that they bought through their Allstate agent.


‘We’re hearing you have to have [all the damaged items] to get insurance’ claims paid, Mr. Truss said, surveying the piles of clothes, toys and books in his front yard. He said he was initially going to wait until he heard from insurance officials before clearing out the house, but “it would be a disaster if we kept waiting any longer.


He’s trying to photograph every item to show an insurance adjuster eventually.”

The National Flood Insurance Program is already bracing to pay out claims equal, or perhaps larger, than the amount disbursed after Superstorm Sandy.

“Standard homeowners’ policies do pay for some damage from water—such as if it enters the house after the wind rips off the roof or a tree crashes through the attic. But if water overflows a riverbank or gushes down a street to seep into a house, the homeowner can expect a claim to be rejected, according to industry lawyers.


The federal flood insurance program’s payouts for Harvey appear on track to rival those made for superstorm Sandy in 2012, the nation’s third costliest hurricane (behind Katrina in 2005 and Andrew in 1992.) So far, 130,622 Sandy claims have cost the program $8.4 billion, an average of $64,331 apiece, according to the Insurance Information Institute trade group.”

And in what’s likely to be a boon for auto makers, payouts for car-related damages could be “several times larger” than those for homes.

“Insurers’ payouts for cars damaged by Harvey’s flooding could be several times larger than those they make for homes. Investment bank Keefe, Bruyette & Woods puts insured personal and commercial auto costs at roughly $4.7 billion. But not all the estimated 500,000 vehicles flooded by Harvey are covered by insurance.


Overall private-market insurance payouts for Harvey are expected to be dominated by payments to business policyholders and range from $10 billion to $20 billion altogether. At the high end, they would likely top those for Sandy, which cost $19.8 billion in 2016 dollars, according to the Insurance Information Institute.”

However, KBW noted that 13% of Texas motorists don’t own any car insurance whatsoever, according to Insurance Research Council. And of those who do, more than a fifth don’t buy ” comprehensive” coverage, which protects against flooding damage. Many vehicle owners go with just the bare-bones liability coverage that is required by law.

In areas where homes were damaged by both flooding and wind, homeowners should expect insurers to try and dispute some of their claims, according to WSJ, local courts should be sympathetic to homeowners.

“If there is a breath of wind and breath of storm surge, that ought to be enough to put in front of the Texas courts and ask for relief for these people,” said David Wood, a policyholder lawyer for corporate clients at Barnes & Thornburg LLP in Los Angeles.”

While individual homeowners may end up settling for reimbursements that don’t cover the damage, at least, according to JPM, the economies of the 70 counties affected by the storm may find an “offset” in the construction boom expected to follow the storm. The investment bank says it could provide a slight boost to US GDP estimates in the third and fourth quarter.

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Caught On Tape: Mexican Authorities Take On Drug Cartel In Yet Another “Military Style” Shootout

September 2, 2017 Tyler Durden 0

In part one of this series called: ‘Why America Needs a Wall’, we showed a video of an intense firefight between Government forces and drug cartel members. The widespread death and destruction rippling through Mexic…

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Vault Containing $70 Billion In German Gold To Be Evacuated As Frankfurt Defuses Massive Bomb

September 2, 2017 Tyler Durden 0

Approximately 60,000 residents of Germany’s financial capital, Frankfurt, will be ordered to evacuate their homes on Sunday as the city’s emergency service staff will attempt to defuse a massive World War Two bomb, discovered recently at a local building site. The 1.4-tonne HC 4000 bomb dropped by the British air force during World War Two was uncovered on a building site on Wismarer Strasse in Frankfurt’s leafy Westend where many wealthy bankers live.

“We have never defused a bomb of this size,” bomb disposal expert Rene Bennert told Reuters, adding that it had been damaged on impact when it was dropped between 1943 and 1945.

Bomb disposal experts who examined it said the massive evacuation could wait until the weekend. “We are still working on the modalities of the evacuation plan,” a spokeswoman for Frankfurt police said on Wednesday.

As a result, ahead of Sunday’s planned evacuation, more than 100 hospital patients, including premature infants and those in intensive care, were evacuated from two Frankfurt hospitals on Saturday, city councillor Markus Frank told Reuters television. 

Every year more than 2,000 tonnes of live bombs and munitions are still found in Germany, even under buildings. In July, a kindergarten was evacuated after teachers discovered an unexploded World War Two bomb on a shelf among some toys. During World War II, Germany was pummeled by 1.5 million tonnes of bombs from British and American warplanes that killed 600,000 people. German officials estimate 15% of the bombs failed to explode, some burrowing six meters (yards) deep.

And while local residents have been eager to comply with the unprecedented evacuation, the biggest since the war, Frankfurt fire and police chiefs said they would use force and incarceration if necessary to clear the area of residents, warning that an uncontrolled explosion of the bomb would be big enough to flatten a city block.

Frankfurt’s residents have to clear the area by 8 a.m. on Sunday and police will ring every doorbell and use helicopters with heat-sensing cameras to make sure nobody is left behind before they start diffusing the bomb.

Where this otherwise trivial evacuation takes on a more sinister, “Die Harder” spin, is when looking at what other structures are impacted by the 1.5 km evacuation radius: these include Frankfurt’s Goethe University, police headquarters, two hospitals, transport systems… oh and the Bundesbank headquarters, which as a reminder ten days ago completed the accelerated repatriation of 674 tonnes of gold – some three years ahead of schedule – from New York and Paris to its vault deep underground.

According to Reuters, the Bundesbank vault which stores 1,710 tonnes of gold deep underground – approximately half the country’s reserves – is located less than 600 meters from the location of the bomb. Well, that particular vault which now holds $70 billion in gold (including $28 billion in freshly repatriated physical) and everything around it, is about to be evacuated. All that’s missing are several dozen dump trucks to take advantage of the massive evacuation that will leave thousands of gold bars without security for 1.5 kilometers in any direction.

While airspace for 1.5 kilometers around the bomb site will be closed, we doubt that will prove a major hurdle to anyone eager to take a stab at a real-life reincarnation of the second Die Hard movie.

Still, to prevent anyone from getting any ideas of following in Simon Gruber’s footsteps, a spokesman for the German Bundesbank said, that “the usual security arrangements” would remain in place while experts worked to disarm the bomb.

The fate of half of Germany’s gold aside, bomb disposal experts said they will make use of a “Rocket Wrench” to try and unscrew the fuses attached to the HC 4,000 bomb. If that fails, a water jet will be used to cut the fuses away from the bomb, Bennert told Reuters. The most dangerous part of the exercise will be applying the wrench, Bennert said.

Roads and transport systems, including the underground, will be closed during the work and for at least two hours after the bomb is defused, to allow patients to be transported back to hospitals without traffic. It is not unusual for unexploded bombs from World War Two air raids to be found in German cities, but rarely are they so large and in such a sensitive position.

Meanwhile, Frankfurters can spend the day at shelters set up at the trade fair and the Jahrhunderthalle convention center. Most museums are offering residents free entry on Sunday, and a few of them will open their doors earlier in the morning than usual.

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Russian diplomats vacate three properties on US orders

September 2, 2017 rbksa 0
Stephen Lam | Reuters
Sun, 2017-09-03 02:30

SAN FRANCISCO, US: Russian diplomats worked to vacate three properties in the United States on Saturday including the six-story consulate in San Francisco, complying with a US order issued in retaliation for Moscow cutting the American diplomatic presence in Russia.
Staff at the San Francisco consulate were seen moving equipment, furniture and small items from the building into minivans and driving away, before coming back for more 20 to 30 minutes later. A group of men in plainclothes and suits were seen on the roof of the consulate looking around, some wearing rubber gloves.
The closure ordered by the Trump administration of the consulate in San Francisco and two buildings housing Russian trade missions in Washington and New York was the latest in tit-for-tat measures between the two countries that have helped plunge relations to a new post-Cold War low.
The United States ordered the Russians to shutter their operations in the buildings by Saturday.
In July, the Kremlin ordered the United States to cut its diplomatic and technical staff in Russia by more than half, to 455 people, to match the number of Russian diplomats in the United States, after the US Congress overwhelmingly approved new sanctions against Russia.
Those US sanctions were imposed as punishment for what US intelligence agencies concluded was Moscow’s interference in the 2016 US presidential election as well as Russia’s annexation of the Crimea region of Ukraine.
As of early Saturday afternoon, the Russian flag was still seen atop the consulate in San Francisco. Someone opened a window above the main entrance and wedged a small Russian flag there. A small contingent of news media and curious passersby gathered below the building.
Images posted on social media on Friday showed black smoke billowing from a chimney of the consulate, on the hottest day in San Francisco’s recorded history. The smoke prompted speculation that diplomatic staff inside the consulate were burning sensitive documents.
Maria Zakharova, the spokeswoman for the Russian foreign ministry, said the fire was part of a “mothballing.”
Russia’s foreign ministry said on Saturday it has summoned a US diplomat in Moscow to protest over plans to conduct searches in Russia’s trade mission complex in Washington, another of the buildings ordered closed.
Images posted on social media on Friday showed smoke and flames visible outside the trade mission building in Washington.

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Bangladeshi PM urged to put pressure on world community to stop Myanmar atrocities on Rohingyas

September 2, 2017 rbksa 0
SHEHAB SUMON | Special To Arab News
Sun, 2017-09-03 02:08

DHAKA: “For last two days I did not get anything to eat. This one-month-old baby is not even getting proper breastfeeding,” said Saleha Khatun, a 26-year-old woman who narrowly escaped with her life from the atrocities of the Myanmar Army and law enforcing agencies in the Rakhine province of Myanmar, and has now taken shelter in a Rohingya camp at Teknaf under Cox’s Bazar district of Bangladesh.

In the past week, more than 20,000 Rohingyas took shelter in different camps and areas of Cox’s Bazar District. Most of them are facing an acute crisis of food and shelter, sitting under the open sky. Bangladesh is facing extreme trouble in coping with this refugee crisis
Nearly half a million Rohingya refugees are already living in the bordering areas of Bangladesh for many years. International Organization for Migration (IOM) is working with the Bangladesh government to provide food and other basic necessities for the refugees, but the efforts still fall short to meet the need.

“Although Bangladesh is a small country … and a developing nation with limited resources, it is putting its best effort to maintain the Rohingyas,” said former ambassador Mohammad Zamir, who is one of the senior foreign policy makers of the ruling party Bangladesh Awami League.

“Despite few odd incidents of pushing back the Rohingyas to Myanmar,” he said, “the Bangladeshi government as well as our people are always very kind and sympathetic to the Rohingya Muslims. But the world community should play a more active role to resolve the crisis and implement the UN (Kofi) Annan Commission’s report on the issue. Moreover, the UN General Assembly session is scheduled to be held in September that should raise a strong voice to ensure equal rights and opportunities for all the people living within the land of Myanmar since their birth.”

“This refugee crisis is no more a bilateral issue between Bangladesh and Myanmar,” said Barrister Rumin Farhana, political affairs secretary for the Bangladesh Nationalist Party. She urged the prime minister to build diplomatic pressure on the international community to stop the atrocities by the Myanmar government so that the Rohingyas can live peacefully in their country.

Rohingyas received international attention after the 2012 Rakhine State riots which resulted in the Rohingya refugee crisis of 2015 and a subsequent military crackdown between 2016 and 2017. A large number of Rohingya fled to the bordering areas with Thailand, Bangladesh, and Pakistan’s port city of Karachi. Nearly 100,000 Rohingyas are estimated to live in camps established for internally displaced persons inside Myanmar. The Rohingyas are not recognized by Myanmar as native ethnic minority and are often denied citizenship and basic rights.

“It is a systematic genocide committed by the Myanmar law enforcing agencies,” said Ameena Mohsin, who is a professor of international relations at Dhaka University. Expressing her frustration over the situation she said: “The Organization of Islamic Cooperation (OIC) should play an effective role to save the Rohingya Muslims.”

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6,000 surveillance cameras installed for safety, security of pilgrims

September 2, 2017 rbksa 0
Sun, 2017-09-03 03:00

MAKKAH: The security and control command center for Hajj installed nearly 6,000 digital cameras to monitor the movement of pilgrims at the holy sites to ensure their safety, according to the head of the center.
In statements to the Saudi Press Agency (SPA), the head of the security and control command center for Hajj, Maj. Gen. Hassan Al-Zahrani, highlighted the work of those working in the center.
The center is responsible for providing information to the security sectors and government and private entities participating in this year’s pilgrimage plan so that they can provide maximum comfort for pilgrims to perform their rituals in a safe and smooth manner, he said.
“The officers and non-commissioned officers were selected to work at the center based on their extensive experiences in dealing with different situations and circumstances that may occur in the field, as well as their ability to use the advanced technology,” Al-Zahrani said.
He also explained that the center operates 5,906 high-definition digital cameras, an increase of 606 cameras in the past two years, enabling it to monitor more areas in greater detail.
These cameras also help predict problems before they occur. They were placed according to certain standards and criteria in these locations around the two holy mosques, Al-Zahrani said.
“2,000 cameras were installed in areas where the Grand Mosque has been expanded, while 3,906 cameras are located around the holy sites and roads leading to them.”
The modern telecommunications network is another step in dealing with any emergency. The telephone section receives notifications from citizens, pilgrims or workers in the field on the phone number 987.
The operations department is then responsible for communicating with field security or the services sectors located near the site of the incident, to quickly deal with the situation.
“The center follows up on the implementation of security, traffic and service plans during Hajj. It benefits from the maps of modern technology covering the holy mosques and the holy sites, and provides more accuracy and speed for those working to provide services to pilgrims,” Al-Zahrani said.

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Indian minister thanks Saudi Arabia for excellent Hajj arrangements

September 2, 2017 rbksa 0
Sun, 2017-09-03 01:52

MAKKAH: The Indian government has praised the Saudi authorities for the excellent arrangements for the Hajj.

Addressing a press conference in Makkah on Saturday, India’s Minister of State for External Affairs M.J. Akbar, who headed this year’s Hajj Goodwill Mission of the Indian Prime Minister, said he had visited a number of camps allocated to Indian pilgrims in Mina and found them satisfactory.

He thanked the Saudi government and the Hajj Ministry for substantially increasing the Indian Hajj quota this year. Nearly 170,000 Indian pilgrims were allowed to perform Hajj this year.

Akbar met Makkah Gov. Prince Khaled Al-Faisal on Friday and conveyed Prime Minister Narendra Modi’s good wishes to King Salman. He thanked the Saudi leadership for providing the best possible facilities for the pilgrims.

The selection of Akbar, a high-profile minister, is seen as a sign of India’s deep attachment to its relationship with Saudi Arabia.

Akbar was accompanied at the press conference by Ambassador Ahmad Javed, Consul General Noor Rahman Sheikh and Consul (Haj) Mohammed Shahid Alam.

Javed described the Hajj operation as “smooth.”

“Everything went according to the plan,” said the ambassador.

Consul General Noor Rahman Sheikh said the arrangements were meticulous.

“The crowd management on the part of the Saudi authorities was exceptional,” he said. “The flow of pilgrims from Mina into Arafat on Thursday and their return to Muzdalifa and back into Mina on Friday took place with clock-work precision.”

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Honest Hajj pilgrim returns bag with cash and jewelry
With prayer, sacrifices, Pakistani Muslims celebrate Eid Al-Adha
US mission thanks Saudi’s King Salman for generous hospitality

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Harvey throws energy markets into turmoil

September 2, 2017 0

By the time Harvey made landfall last month, the US had become a big exporter of crude oil and refined products. The shale revolution had turned the …The post Harvey throws energy markets into turmoil appeared first on
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How India’s leather tanners pay the price of Hindu nationalism

September 2, 2017 rbksa 0
Sanjay Kumar
Sun, 2017-09-03 03:00

DELHI: With sadness in his eyes, a forlorn Hafiz-ur-Rahman surveys what used to be his thriving leather tannery. The business that used to employ up to 30 people is deserted, the remnants of old stock lie scattered around, four huge rolling drums for cleaning cow hides sit motionless.
“Not long ago this whole compound used to buzz with people and activities,” says Hafiz, 71, known to everyone as Babu Bhai, who has run the tannery for nearly 50 years. “But in more than three months, we have not received any fresh supply of leather and I cannot afford to feed workers who are sitting idle.”
Like about 400 other tanneries in Kanpur, the largest city in the Indian state of Uttar Pradesh, Babu Bhai’s business is a victim of the Hindu nationalism stemming from the government of Prime Minister Narendra Modi and from his acolyte Yogi Adityanath, the firebrand anti-Muslim cleric who became chief minister of Uttar Pradesh in March.
In May, Modi’s government decreed that animal markets could trade cow and buffalo only for agricultural purposes such as ploughing and dairy production, and not for the leather industry.
Adityanath, a militant religious extremist who once described Muslims as “a crop of two-legged animals that has to be stopped,” went further. He ordered the closure of all slaughterhouses and butcher’s shops that he deemed illegal.
In Adityanath’s power base of Gorakhpur, 370 kilometers from Kanpur, vigilantes from the Hindu Yuva Vahini, the extremist militant youth organisation that Adityanath founded and which is notorious for communal violence, is taking action on his orders.
Ratnakar Chaturvedi and his men are busy raiding goods vehicles and checking whether any cattle are being transported. Anyone found doing so will be beaten up. “Those who live in India will have to follow Indian culture and civilization,” Chaturvedi says.
“From childhood we are taught that the cow is our mother and any harm to a cow is intolerable to us. The closure of slaughterhouses is good for society; it improves the environment.”
India is the world’s fifth-largest producer of leather, 1.5 million square feet a year, about a third of it from cows. Twenty of its 29 states, including Uttar Pradesh, now have laws banning cow slaughter. “Production is down by 52 per cent since the ban. The future of the tannery industry is dark now,” says Dr. Firoz Alam, general secretary of the Small Tanners Association in Kanpur.
More than 100,000 families are involved in the tannery industry, and 65 percent of them are directly affected by the ban on slaughterhouses and the decree on cattle trade, Alam says. “Most of the foreign buyers have transferred their orders to other countries. Ever since the new government has come they are inflicting mental torture on the Muslim minority.”
Babu Bhai, however, says it is wrong to say that Muslims are paying a higher price than anyone else. Seventy percent of the labourers in the leather industry are Dalit, the marginalized Hindu community. “Even people working at a higher level, the majority of them are Hindus. So the whole of society is affected.
“I have been working here since 1968, after my father bought the tannery. I have never faced this kind of crisis in the leather industry as it is today. The ban on slaughterhouses threatens our existence.
“These slaughterhouses have been in existence for centuries and supporting many families directly or indirectly, but the blanket ban has rendered many jobless.”
Babu Bhai is concerned not just for the future of his tannery, but of his family. It upsets him that he is not bequeathing a profitable industry to his two sons, as his father did for him in 1968.
“I don’t have any reason to be happy. My business is going down, I don’t see any future, I have lost sleep in the night. Instead of our trouble going down it’s going up, getting compounded, it’s not good for my sons.”

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A Simple Program To Stabilize The Economy (In Four Words)

September 2, 2017 Tyler Durden 0

Authord by Joseph Salerno via The Mises Institute,
Paul Cantor, Clifton Waller Barrett Professor of English at the University of Virginia and Associated Scholar of the Mises Institute, attended Ludwig von Mises’s seminar at NYU as a young ma…

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