Storm brews over adding wind coverage to federal flood program

WASHINGTON – March 27, 2008 – The battle continues to heat up within Congress and between congressional members and the insurance industry. U.S. Rep. Gene Taylor (D-Miss.) proposed that the reauthorization of the National Flood Insurance Program (NFIP) include wind coverage, which was passed by the House.

The fight to include wind coverage, according to Taylor, is a direct result of Hurricane Katrina. Taylor remains incensed that he and his neighbors were compensated only for flood damage because insurance companies claimed damage came from rising waters rather than wind. But Taylor and his neighbors sued and won, though the process stressed homeowners and cost the government billions of dollars that Taylor says could have been used to help the affected Americans.

“It was unjust at every level – for the individual and for society as a whole,” says Taylor. “Insurance companies tried to screw the nation.”

But the Senate’s companion legislation does not include wind coverage or other enhancements supported by Taylor.

According to Washington Post columnist Jeffrey Birnbaum, it is not often that the government and an industry battle over which one can efficiently run a business segment. Insurance trade groups contend that to carve out wind insurance from traditional homeowners’ insurance is senseless and would further impose upon the finances of the NFIP. Taylor, on the other hand, indicates the wind insurance provision would not tax the NFIP because coverage would be actuarially sound and “cost-free” for the government.

Source: Washington Post (03/25/08) P. A13; Birnbaum, Jeffrey H.

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