Gulf Coast Congressman Calls Again for Wind Coverage in National Flood Program

Rep. Gene Taylor, a Democratic congressman whose Mississippi home was wrecked by Hurricane Katrina in 2004, is again urging the Obama administration to insist on wind-damage coverage in an overhaul of the National Flood Insurance Program. Taking advantage of the timing of President Barack Obama's visit to New Orleans, Taylor wrote a letter to him to plead the case of the nearby Mississippi Gulf Coast.

"Inland, beyond the storm surge area, insurers paid hundreds of thousands of wind damage claims," Taylor wrote. "But in the areas that experienced the strongest winds and storm surge flooding, State Farm, Allstate, Nationwide, USAA and others blamed almost all the destruction on flooding, without conducting investigations to prove the cause." So, he said, "some of the largest insurance companies in America were not going to honor their policies."

"In Mississippi, thousands of property owners have no wind insurance available except through the Mississippi wind pool, the state-sponsored insurer of last resort," the prominent Blue Dog Democrat pointed out in the letter. He argued for adding coverage for additional aspects of storm damage -- such as that caused by high winds -- to the NFIP.

But Taylor's efforts have been opposed in the past by Obama's White House. In an April 24 letter to House Financial Services Chairman Barney Frank, D-Mass., Homeland Security Secretary Janet Napolitano said the administration opposed legislation from Taylor that would authorize the program to offer optional commercial and residential policies covering both wind and flood losses (BestWire, May 14, 2009). The insurance industry -- which has settled many lawsuits in recent years over Katrina damage -- welcomed that position.

Taylor said in his letter he was "surprised and disappointed" by that resistance, though he pointed out that administration officials have told him they would review his legislation again with a "fresh look." His "Multiple Peril Insurance Act" is awaiting committee action and is supported by 22 co-sponsors.

The NFIP has been extended as part of the recent continuing budget resolution, putting off its previous Sept. 30 expiration until the end of October (BestWire, Oct. 1, 2009). Debate over significant changes to the program has been repeatedly put off by extensions of its expiration. A bill approved by the House but awaiting action in the Senate would put the matter off even further -- into next March.

The Property Casualty Insurers Association of America has come out in favor of the bill, though it also advocates some reforms to the program. "We will work closely with the House and Senate to advocate a long-term extension that preserves the program's viability and does not needlessly expand its scope into other areas, such as windstorm insurance, where coverage is already available through private industry or state programs," David A. Sampson, PCI's president and chief executive officer, had said in a statement (BestWire, March 11, 2009).