Lott Introduces Katrina Insurance
From Sen. Trent Lott - 10/27/05 - GCN
With thousands of Mississippi Coast homeowners without flood insurance, U.S. Senator Trent Lott of Mississippi Thursday introduced in the U.S. Senate a bill to enable Katrina victims whose homes were not covered by flood insurance to retroactively buy into the federally-subsidized flood insurance program.
“I would prefer that the insurance industry step up to the plate,” Senator Lott said. “But I will pursue every avenue for those Mississippians who have lost their homes, who did not have flood insurance because they did not live in a flood plain, but who are being denied coverage by their insurance companies. I am taking the shotgun approach to the insurance question. This is just one of several paths I’m pursuing to relieve those who have suffered damage and who are getting little or no support from their insurance company. I know there’s been a lot of debate about whether this is the absolute best solution, but we must pursue every potential way to bring Katrina’s victims more relief, including this one.”
The bill introduced today is a companion to the measure introduced by Congressman Gene Taylor of Mississippi in the U.S. House as the “Hurricane Katrina and Hurricane Rita Flood Insurance Buy-In Act.” The bill:
* Instructs the Director of the Federal Emergency Management Agency (FEMA) to make flood insurance coverage available for eligible structures (but not their contents) for flooding resulting from Hurricane Katrina or Hurricane Rita;
* Limits eligibility to structures located in an area not subject to the mandatory purchase requirements of the national flood insurance program, and which were not covered by such insurance at the time of the hurricanes, but were covered for wind or windstorm damage by an insurance policy.
* Limits the amount of a claim that can be paid to the lesser of the maximum coverage the property is eligible for under the national flood insurance program and the amount for which the property is insured against wind or windstorm damage.
* Prescribes that the owner of the structure shall pay premiums equal to 105 percent of what the owner would have been required to pay into the national flood insurance program for 10 years;
* Requires structures covered under this program to maintain enrollment in the national flood insurance program and prohibits FEMA from considering the payments made or premiums collected under this program when setting future national flood insurance program premiums for the structure.
Despite introducing the bill in the Senate, Senator Lott said he would prefer to see private insurers absorb most of the flood-cost burden, and he implored insurers to do more.
“This emergency is unprecedented and is requiring private citizens, local, federal and state governments and the private sector to go above and beyond anything previously envisioned or expected,” Senator Lott continued. “Insurers should exude that same level of commitment. The squabble over whether damage was caused by wind or water doesn’t help homeowners. Hurricanes are wind. In almost every case, inside or outside the flood zone, there is going to be a certain amount of damage caused by hurricane winds. Insurers, regulators and all those involved should recognize this and explore every potential way to make just compensation to those who suffered catastrophic damage.”
In addition to this bill, Senator Lott is exploring other promising legislation to help homeowners without coverage, including a proposal in the Senate Homeland Security and Government Affairs Committee that will provide individuals with more individual FEMA assistance.
S. 1777, now in the Senate Homeland Security and Government Affairs Committee, would waive the $26,200 per disaster declaration cap on individual assistance for Hurricane Katrina. It would further waive the $5,000 sub-cap on home repair and $10,500 cap on home replacement for Katrina victims qualifying for individual assistance.
While the provision does not differentiate between those who did or didn’t have flood insurance, other statutes prohibit double-dipping for the individual assistance and flood insurance programs and private insurance.