U.S. Financial Services Committee Considering Hurricane Rita Flood Insurance Buy-In-Act
The U.S. Financial Services Committee is considering the Hurricane Rita Flood Insurance Buy-In-Act, an effort which would make it possible for property owners who did not live in flood plains and had no flood insurance, yet suffered losses in the storms, to purchase coverage under the National Flood Insurance program.
Lee Harrell, Mississippi’s deputy insurance commissioner, told the Gulfport News the state’s policyholders have received more than $431 million to date following Hurricane Katrina, and that amount keeps growing. Hancock, Harrison and Jackson counties, all on the Gulf Coast, had 93,283 owner-occupied homes prior to Katrina. Of those, less than a fourth, 21,593 had flood insurance policies that collectively covered $3.2 billion in losses.
Harrell said flood insurance pays a maximum of $250,000 for the structure and up to $100,000 for contents.
If the act is approved, property owners would pay the equivalent of National Flood Insurance Program premiums for 10 years, with a 5 percent penalty. Premiums would equal the rate of prevailing premiums in the area prior to Hurricane Katrina and permits property owners to deduct premium payments and the penalty from the claim payment.
The bill, introduced last week by 4th District U.S. Rep. Gene Taylor will go to the full House for a vote if it comes out of the committee.
Among the 29 original co-sponsors of the bill are 2nd District U.S. Rep. Bennie Thompson and U.S. Rep. Barney Frank, D-Massachusetts. “(Frank) helped (Taylor) put it together and is the original co-sponsor of that legislation,” Steve Adamske, communications director for Financial Services Democratic Staff said.
Insurance Commissioner George Dale would not say whether he supports the measure, but has lobbied for federal assistance.
“We have advocated for quite some time. In fact, three weeks ago, we wrote all our congressional delegation and strongly encouraged them to come up with some way the federal government could bail out those people who did not have flood insurance or either their homeowner’s policy did not cover their loss,” Dale told the News. “Our Gulf Coast residents are going to have to have some federal and state assistance to be able to overcome this.”
State Farm, which has brought in 2,600 catastrophic claim adjusters, continues to tally the numbers, spokeswoman Susan Lamey told the News.
“They are going to be out there until the very end. And it’s too early to assess overall damages,” Lamey said.
Through Thursday, State Farm policyholders in Mississippi had filed 75,191 claims for structures and 24,338 automobile claims. Its Louisiana policyholders filed 166,535 claims for homes and 52,399 for automobiles. Those in Alabama had submitted 15,722 homeowner claims and 2,954 for autos.
Following Hurricane Rita, State Farm has had 209 claims submitted between Mississippi and Alabama, Lamey said. The company continues to rotate claims centers throughout the state near affected areas.
Dale said the $293 million paid out by State Farm included $65 million in automobile claims.
Allstate spokesman Mike Trevino said the company likely will report its claims in third-quarter filings.
Taylor, who lost his home to the storm and had flood insurance, is a member of the House Select Committee that is investigating Hurricane Katrina response. His district includes the Gulf Coast and south Mississippi, which suffered heavy damage from Hurricane Katrina.
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