Senate rejects bill to add wind damage to flood coverage

http://www.chron.com/disp/story.mpl/hurricane/5762444.html

Senate rejects bill to add wind damage to flood coverage
By JIM ABRAMS

WASHINGTON — The Senate on Wednesday rejected a bid by Gulf state
senators to add wind coverage to a financially strapped federal program
that provides flood insurance.

Lawmakers from Louisiana and Mississippi cited problems that occurred
after Hurricane Katrina and other big 2005 storms when private insurers
covering wind damage claimed that destruction resulted from flooding,
thus shifting the burden of payments to taxpayers.

But the Senate voted 73-19 against the amendment by Sen. Roger Wicker,
R-Miss., that would have provided optional multiple peril insurance as
part of the 40-year old National Flood Insurance Program.

The Senate is debating legislation to bail out and overhaul the
program, which expires at the end of September.

The Senate bill would forgive the more than $17 billion the Federal
Emergency Management Agency owes the U.S. Treasury and restore fiscal
integrity by requiring a larger deductible, requiring more at-risk
homeowners to buy insurance, ending subsidies to some vacation homes
and businesses, and increasing the allowable annual rate increase to 15
percent.

The flood insurance program, which is run by FEMA, operates in some
20,000 communities that adopt and enforce local floodplain maintenance
plans. Now with 5.5 million policyholders, it generally paid its own
way through premiums until hit by the catastrophic damage of Katrina.

The House passed its version of the bill in September with a new wind
damage provision. It was championed by Rep. Gene Taylor, D-Miss., whose
home was destroyed by Katrina.

The Government Accountability Office, in a study released this week,
said not requiring adjustors to distinguish between wind and floods
could expedite claim payments and reduce the potential for lawsuits.

The White House, in a statement, said it supports passage of the bill
but would recommend a presidential veto if a wind provision was added.

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