The next paragraph then mischaracterizes Broussard:

The insurance industry has won a few of these legal skirmishes. But that changed last month when a judge told State Farm to pay a Mississippi couple a $232,000 claim and a jury awarded $2.5 million in punitive damages (since reduced by a judge to $1 million). State Farm is the nation’s largest home insurer and has already paid $1.1 billion in Katrina claims in Mississippi alone. But the company looked at hundreds of other pending suits, did the math, and threw itself on the mercy of Mr. Hood. State Farm agreed to re-open 35,000 claims it had already settled and to pay at least $50 million more. The insurer also agree to hand over $80 million to some 640 households represented by tort kingpin Dickie Scruggs.

Hood believes, among other things, that a storm surge is covered. It is fine to disagree. But, again, the main insurance disputes, including the case cited by the Journal as well as all criminal probes, are not about getting insurers to cover flood damage. Whatever one’s ideological orientation (and leave it to the Journal editorial board to politicize the weather), employing falsehood in the service of whatever argument you want to make about the agonies suffered by a few corporate actors at the hands of evil tort lawyers and demagoguing politicians is unacceptable. Fix the error.

The New York Times isn’t exempt, as here in a January story, which says State Farm needing to solve a “public relations headache” by settling after Broussard.

While State Farm and the other insurers may have had some strong legal arguments, they have been widely perceived as insensitive. In many cases, residents whose houses were reduced to concrete slab foundations received just a few thousand dollars in payments. Some received nothing.(2)

State Farm’s headache was legal, factual and contractual. Its own witness sunk it. It knew wind damaged the house and denied the claim anyway. It had some of the world’s most expensive Wall Street lawyers, Skadden, Arps, Slate, Meagher & Flom, and still lost. That’s why it settled. Allstate has the same headaches, after a federal jury in New Orleans in April found the company acted in bad faith in denying a wind claim.

I know why insurers cheat. I confess I do not know why business journalists go along with it.

And a word about wind. Wind is a reason there is insurance. It is an event in the anticipation of which prudent homeowners buy homeowners’ policies at all. Wind, with fire, is why State Farm and Allstate by themselves collected $20 billion—that’s with a “b”—in homeowners premiums in 2005 alone (an astonishing 21 percent of which went to pay for commissions for agents and other selling expenses. Don’t take my word for it. That’s the insurance industry talking).

Anyone curious about the Great Windless Hurricane of 2005, even today, need only go to nola.com, and type “Rebecca Mowbray” in the search box. Those curious about what happened in Southern Mississippi—true, WSJ editorialists, those people don’t count, but let’s act like they do for the sake of argument—can go to sunherald.com, and search under “Anita Lee.” I will have more on those two remarkable reporters in another column.

Despite everything, however, The Audit remains confident that excellence in business journalism is possible, even in Manhattan. As proof, The New York Times weighed in with a post-Katrina story that recognizes the simple reality that insurance is Topic A in any discussion of the post-Katrina gulf, or is at least a close second to governmental failure.

Insurance companies may have paid out $11 billion to Louisianians in the two years since Hurricane Katrina, but they have also become a new villain in the tales people tell about the slow recovery here. Every neighborhood is full of horror stories about companies that reneged on their promises, offered only pennies on the dollar in settlements, dribbled out payments, deliberately underestimated the costs of repairs, dropped longtime customers and sharply increased the price of coverage.

And it is not just talk.

The story goes to cite lawsuits (6,600 in New Orleans federal court, thousands more in state courts) and complaints and phone calls to the state insurance department (4,700 in 2006, 20,000, a month after the storm):

I have plenty of quibbles with this generally excellent Times piece. There should be a moratorium, for instance, on the use of this statistic:

Industry spokesmen say that most homeowners are satisfied and that 99 percent of homeowners’ claims have been settled.

Even the insurance industry will admit that “settled” means closed unilaterally by insurers. It does not remotely imply that anyone is happy.

The story misses evidence of widespread insurer misconduct, evidence filed among court documents. What is more, it is evidence that federal courts have already found to be true. If we don’t believe judges and juries, why have them?

But insurance is well-funded, PR-savvy, purposely convoluted, singularly untransparent, and virtually unregulated in terms of market conduct. It is a difficult assignment. And the Times story does reflect, for a national audience, the fact that across the political spectrum in the gulf, insurance is considered a, and even perhaps the, major roadblock to post-Katrina recovery.

One outfit that needs no help from me is, however, is unheralded Bloomberg Markets Magazine, which this month has weighed in with an important contribution to the debate.

Note the unhedged, matter-of -fact, three-word headline:

The Insurance Hoax

How’s that for clear? But just in case you missed the point, here is the subhead. I will add emphasis:

Property insurers use secret tactics to cheat customers out of payments—as profits break records.

This is not Mother Jones here, just a mainstream business news outlet, albeit one that does not seem to believe that we are living in the best of all possible worlds.