The National Flood Insurance Program (NFIP) is facing a September 30th deadline. That is the date the temporary extension runs out on the Flood Program. Unless a bill that reauthorizes the program passes, the NFIP could expire. But this week, the House of Representatives passed H.R. 1309 (The Flood Insurance Reform Act) by an overwhelming majority.


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The answer to the title question should be:

"Nobody should trust the government to conclusively determine anything."

The property insurance law news is that a Mississippi Senator has proposed federal legislation that would allow FEMA to determine the amount of wind damage versus flood damage an insured structure sustained when the issue arises. Anita Lee, of the Sun-Herald, reported on how this proposed system would work in Wicker Charts New Course for NFIP Changes:

The National Oceanographic and Atmospheric Administration would gather hurricane data from public and private sources. FEMA would use the data to apportion losses between wind and flood.

Elevation and construction materials for each property would be included in the assessment.

Any disputes that arose over a wind/water allocation would be resolved by a FEMA-appointed arbitration panel.

Lawsuits are prohibited. However, an insurance company and policyholder could, by agreement, opt out of an assessment.


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The attempts by Mississippi’s Gene Taylor to craft an insurance product that fully covers hurricane losses seems to be having trouble, but not because Gene Taylor is not trying. While the House of Representatives passed a bill supported by Taylor which includes coverage for the perils of wind and storm surge into one policy, one Republican Senator offered a compromise bill which does not accomplish that but merely proposes a different method of dispute resolution. As reported in the National Underwriter, both Taylor and the insurance industry think the compromise legislation does not work.


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Mississippi Representative Gene Taylor successfully placed language into House Bill H.R. 1264—“the Multiple Peril Insurance Act”— which would require “Write Your Own” insurers participating in the National Flood Program to remove anti-concurrent causation language from their all risk insurance policies. Taylor’s house was destroyed in Hurricane Katrina. Many of his neighbors’ insurance claims were denied based on the continuing wind versus flood insurance coverage controversy which I noted recently in Texas Windstorm Insurer Settles 2,400 Hurricane Ike Slab Claims.

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The United States House of Representatives has unanimously passed a bill reinstating and extending the National Flood Insurance Program until September 30, 2010, according to an article in the National Underwriter, New NFIP Extension Bill Passes House; Senate Action Uncertain. The bill (H.R. 5569) will be sent to the Senate for further action. My suggestion in Flood Insurance is Harder to Find and Politics is One Reason was to call all Congressmen. Now we are down to just the Senators that need to get their act together.

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Stupidity is what will kill this country. Financed real estate transactions cannot occur in some parts of the country without flood insurance being purchased on the structure. Such insurance is difficult to find in the private market. As a result, the National Flood Program exists. But, it can only exist if Congress allows it, and Congress has left for its Easter vacation without passing legislation allowing the National Flood Program to operate.


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Imagine a government could make arbitrary decisions about your rights without question. Do you think that would happen in China or the United States? Well, if it involves your national flood insurance policy, it has been happening in the United States for a long time. One federal judge has seen through the unfairness and called a halt to this practice in the recent case of Thomas L. Moffett v. Computer Sciences Corp., et al,. Civil No. 05-1547 (Md. D. Ct., July 6, 2009).


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I was thinking about the question of property insurance trade associations and lobbying while reading today’s St. Petersburg Times article, At what Cost Care? The article was a question and answer discussion with Wendell Potter, who was a public relations executive for two major health insurers. Potter has given an inside view into the political and social power of the health insurance industry in a manner most Americans probably deplore. I wonder if property insurers are different? I doubt it.


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