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Wind Damage Not Added To Flood Insurance Bill

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By BILLY HOUSE, The Tampa Tribune

Published: October 18, 2007

WASHINGTON - A Senate committee Wednesday declined to add wind damage coverage to a bill to overhaul and renew the national flood insurance program.

Sen. Mel Martinez, R-Fla., however, will work with Sen. Charles Schumer, D.-N.Y., to build support for a wind-provision amendment of the bill when it comes before the full Senate for a vote, a spokesman said.

The House already has added wind protection to its version of the flood bill that passed 263-146 last month, despite a presidential veto threat and White House warnings that it would be 'fiscally irresponsible.'

The chairman of the Senate Committee On Banking, Housing and Urban Affairs, Chris Dodd, D-Conn., and its top Republican, Richard Shelby of Alabama, oppose adding wind damage coverage, however.

Any differences in the House and Senate bills to reauthorize the National Flood Insurance Program through 2013 will have to be reconciled.

Wednesday, Martinez told fellow banking committee members that 'Wind insurance would have been a great addition to this program in order to stabilize and improve the insurance market in states like Florida.'

Martinez will work with Schumer to add a wind provision with sufficient cost protections to the bill said Ken Lundberg, a Martinez spokesman.

Flood insurance is mandatory for property owners in high-risk flood zones.

The national flood program protects more than 5 million policyholders with more than 41 percent, or 2.1 million, in Florida.

Opponents of adding wind coverage, including Shelby and some insurers, argue that it would be fiscally irresponsible.

The government-sponsored program is already nearly $18 billion in debt, much of that resulting from payouts after Hurricanes Katrina and Rita.

The bill passed by the committee Wednesday would forgive that debt. The current flood program expires at the end of fiscal 2008.

Language in the House bill giving flood insurance policyholders the option to purchase wind coverage is intended to address disputes between private insurers and Gulf Coast residents since Hurricane Katrina.

Some insurance companies blamed most storm damage on flooding - which is covered by the Federal Emergency Management Agency - and not wind, for which they would have to pay.

Dodd said the costs of the new coverage may be huge. Much of the insurance industry strongly opposes including wind damage.

Former Montana Gov. Marc Racicot, president of the American Insurance Association, said he is pleased wind coverage wasn't included.

'Adding wind coverage would result in a dramatic expansion of the flood program - with the potential for huge deficits, he said. 'It would also encourage building in hurricane-prone regions, putting more people and property in the path of devastating storms.'

Reporter Billy House can be reached at (202) 662-7673 or at bhouse@tampatrib.com

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