Federal Wind Insurance Seen

May 7, 2008

The Tampa Tribune--May 7, 2008


WASHINGTON – A Senate bill to renew the national flood insurance program is expected to reach a final vote this week, but not before lawmakers from Florida and other Gulf Coast states try to rewrite it.

As now drafted, the bill does not allow flood insurance customers an option of also buying wind coverage, unlike a version passed by the House of Representatives last year over White House protests that it would be "fiscally irresponsible" to do so.

Even so, lawmakers from Mississippi, Louisiana and Florida are expected to press for votes in the Senate today or Thursday on amendments to add the wind insurance to the Senate’s bill, as well.

"As the 2008 hurricane season approaches, I believe we should not miss this opportunity to address the problem," said GOP Sen. Thad Cochran of Mississippi, referring to what he described as a lack of availability of affordable wind insurance for those living near the nation’s coastlines.

Meanwhile, Florida’s two senators, Democrat Bill Nelson and Republican Mel Martinez, are considering whether to offer a separate amendment to create a national catastrophic fund to help lower home insurance costs in areas hit by natural disasters such as hurricanes.

Nelson already co-sponsors a bill to create a CatFund with fellow Democrat Sen. Hillary Rodham Clinton of New York, which mirrors legislation already passed in the House.

Any changes in the national flood program could have more effect on Florida than any other state.

The program includes 2.1 million policyholders in Florida, about 41 percent of its 5 million policyholders nationwide.

But the top Democrat and top Republican on the Senate Banking, Housing and Urban Affairs Committee – which drafted the bill – took to the Senate floor Tuesday to explain why neither wind insurance nor a CatFund was included.

"There’s been a good deal of discussion about adding wind and other risks to the flood insurance program," acknowledged the committee chairman, Sen. Chris Dodd, D-Conn.

But both Dodd and Sen. Richard Shelby, R-Ala., said their committee had no way of determining the cost of adding such programs to the already debt-ridden national flood insurance program. Shelby predicted it would be billions of dollars more.

"We’re literally in the dark financially if we try to expand it," Dodd said.

A study by the General Accountability Office released this week appears to add credence to claims by the White House and others that adding wind coverage to the National Flood Insurance Program would present major challenges to the Federal Emergency Management Agency and could expose taxpayers to high costs.

But along with renewing the federal flood program through 2013, the Senate’s bill creates a special commission to study the availability and affordability of catastrophic insurance to deem whether a national program is necessary, Dodd said.