Senate committee votes today on flood bill

By MARIA RECIO

SUN HERALD WASHINGTON BUREAU

WASHINGTON -- The Senate Banking Committee today votes on a flood insurance reform bill Sens. Chuck Schumer, D-N.Y., and Mel Martinez, R-Fla., will try to amend to include wind damage - an explosive issue that has roiled coastal communities since Hurricane Katrina.

The House passed a flood insurance bill last month 263 to 146 that included the "multiperil" provision giving policy holders the option to purchase wind coverage, but the bill the Senate Banking Committee will consider or "mark up" will not include the wind provision.

Martinez, however, will offer the wind amendment, said spokesman Ken Lundberg, because "it's a great idea. It would help Florida and other coastal areas."

Senate Minority Whip Trent Lott, R-Miss., who lost his home in Katrina, said he had spoken with Chairman Chris Dodd, D-Conn., and ranking member Sen. Richard Shelby, R-Ala., and "Dodd said he needed to do more research and Shelby's against it."

Asked about Schumer, who raised the wind issue during a committee hearing, Lott said, "I hear he's pushing it. I hope he's successful." The New York senator has been angry about insurance companies' refusal to write wind policies on Long Island.

Martinez is concerned Florida's property insurance agency, Citizens Property Insurance, created after private insurers stopped writing policies, would be hurt by a catastrophic storm.

Gulf Coast residents have been battling private insurers over wind damage since Hurricane Katrina, with companies maintaining water, not wind, caused most of the destruction. Water damage is covered by the federal government's program, a part of FEMA.

Lott sued his insurer, State Farm Fire and Casualty Co., and settled earlier this year.

Opponents of the bill, including Shelby, insurers and some public interest groups, say the flood insurance program is essentially bankrupt and adding wind would deplete the government-sponsored program.

The flood insurance program, which is administered by the insurers, had to borrow $17.5 billion more than it took in because of hurricanes Katrina and Rita claims.

The Flood Insurance Reform and Modernization Act of 2007 has bipartisan support for changes in the program, which would increase premiums, phase out subsidized rates paid by vacation-home owners and raise the flood insurance fund's borrowing authority.

The Schumer-Martinez amendment mirrors the House-passed multiple-peril bill by setting a residential policy limit at $500,000 for the structure and $150,000 for contents. Nonresidential properties would be covered up to $1 million for structure and $750,000 for contents and business interruption. The bill increases the maximum coverage for flood insurance policies from $250,000 to $335,000 for residences.

The wind program would be paid for from actuarially determined premiums.

© 2007 Sun Herald. All Rights Reserved.


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