U.S. Senate dips toe into flood insurance overhaul

Tue Oct 2, 2007 11:37pm BST

By Kevin Drawbaugh

WASHINGTON, Oct 2 (Reuters) - A U.S. Senate panel inched toward reforming federal flood insurance on Tuesday, amid broad agreement that better flood maps are badly needed and with at least one senator backing a plan to add wind damage coverage.

The House of Representatives last week voted to overhaul the almost 40-year-old National Flood Insurance Program, which was badly crippled by the 2005 hurricanes, including Katrina and Rita that caused billions of dollars in property damage.

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The House bill would expand the flood program to cover wind damage, a response to outrage among some Gulf Coast homeowners over insurers' refusal to pay claims for hurricane damage. Many disputes over coverage centered on wind versus water damage.

Insurers are lobbying hard to block a wind expansion to the program, arguing it would crowd them out of a viable business. The Bush administration has pledged to veto the House bill.

Flood Insurance Program Extended

By JIM ABRAMS – 19 hours ago

WASHINGTON (AP) — The House voted Thursday to strengthen the Katrina-swamped national flood insurance program, but provisions to extend the 40-year-old program to cover wind damage drew a White House veto threat.

The legislation, passed 263-146, extends through 2013 a program that provides affordable insurance, not always available on the private market, to homeowners in flood-prone areas while imposing land use and building requirements aimed at reducing future flood damage.

It is estimated that the program, which takes in about $2.7 billion in premiums annually, normally saves the Treasury $1 billion a year in flood-loss expenses.

But that all changed with the 2005 hurricane season when claims from Katrina and Rita exceeded the aggregate amount of all the claims previously paid in the history of the program.

The program's borrowing authority, limited by law to $1.5 billion before 2005, was raised three times by Congress, to the current $20.8 billion. The new legislation would increase that to $21.5 billion. The NFIP now owes the Treasury about $18 billion.

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Bush vows veto of U.S. House flood insurance bill

Wed Sep 26, 2007 5:05pm ET

WASHINGTON, Sept 26 (Reuters) - The Bush administration on Wednesday threatened to veto a post-Katrina bill in the U.S. House of Representatives that would expand the federal government's flood insurance program to cover wind damage.

The bill sponsored by California Democrat Maxine Waters was expected to reach the House floor on Thursday.

Among other steps, it would add wind damage to perils covered under the National Flood Insurance Program (NFIP), set up in 1968.

The White House said in a statement it opposes adding wind coverage to the national flood program.

"Shifting liabilities for windstorm damage from the private sector to the NFIP would be fiscally irresponsible. Federal government insurance would displace insurance that is already provided by the private market," it said.

In addition, the White House said including wind damage would mean all taxpayers would have to subsidize insurance rates for people in high-risk areas.

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National Flood Insurance Program up for Vote

The National Flood Insurance Program (NFIP) is up for a vote again, and this insurance provides important affordable coverage for people in many areas of the Seattle / Puget Sound region. Most home owner insurance policies do not cover flood damage, and many home owners are not even aware that they have no coverage in this area. The NFIP covers obvious areas such as rivers overflowing their banks into property, yet many people also don't know that it includes high tidal/wave action on the Sound, land movement due to heavy rains, mudslides, and related catastrophes that could potentially destroy a home and yet not be covered by the home's regular insurance. With our area's huge expanses of Sound and lake coastline, and our steep terrain with homes perched on fragile hillsides to maximize views, this can be important insurance for many home owners in many different locations.

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Flood insurance makes UK "unique"

The UK is one of the only countries where flood insurance is widely available on the free market, it has been claimed.

According to the Association of British Insurers (ABI), people in other countries usually have to purchase flood insurance policies through government-backed schemes, meaning that the UK currently occupies a "unique" position in the world market.

However, this situation is now under threat after the catastrophic events of the summer and the growing risk of flooding across the country due to increased rainfall, a spokesperson for the organisation stated.

He said: "The UK is pretty much unique in that flood insurance is widely available.

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A flood of claims

Sep 13th 2007
From Economist.com

Insuring against climate change

AFP

IT WAS a very wet summer in much of England. Floods in central and western parts of the country, the worst in decades, resulted in widespread misery: around 60,000 homes and businesses were damaged or destroyed. Insurers, which are facing at least £3 billion ($6.1 billion) in claims, have said they expect household premiums to rise next year.

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5 myths about flood insurance

When my basement flooded this spring, I learned the hard way about what my policy did not cover. Turns out, I was lucky. But flood victims like the McCoys weren't. Read on.

By Sharon Epperson

You can live on high land and still get hit by water damage.

Dora and Larry McCoy bought their Lane, Kan., home five years ago directly from the sellers. They didn't take out a mortgage and didn't think they would need flood insurance. Then, on June 29, after heavy rains pummeled their one-story home, water from a nearby creek overflowed, seeped into the basement and rose almost to the ceiling. The damage was too severe to repair, and the house was demolished. "I went from owning a home to being in debt," Dora says. "They make flood insurance so high, most people around here don't have it."

People make a lot of assumptions about flood insurance, and those misconceptions can be costly. Here are five myths -- and the facts:

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Zurich adds 260 million dollars to summer flood bill

ZURICH (AFP) — The Swiss insurance group Zurich Financial Services said Tuesday that it expected that claims from floods in Britain in July would reach up to 260 million dollars.

That would bring Zurich's total claims estimate for summer floods in Britain up to about 660 million dollars, including an earlier figure of 400 million dollars due to floods in northern and central England in June.

The latest 260 million dollar estimate related to floods on July 20 to 23 in southern England, the company said in a statement.

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Flood recovery entering ‘critical period’

By James Wilson, North of England Correspondent

Published: September 4 2007 04:00 | Last updated: September 4 2007 04:00

Businesses affected by the extensive summer floods were moving into a “critical period” as they tried to recover and re-equip, John Hutton, the secretary of state for business and enterprise, acknowledged on Monday as he met affected companies in Yorkshire.

Mr Hutton assured affected businesses that the government was “in it for the long haul” and would examine other ways to help business, such as working with insurers to make insurance cover available in high-risk areas. Attending a “flood summit” in Doncaster, one of the towns worst affected by floods, Mr Hutton did not announce any new aid but said financial support for non-insured losses offered by the region’s development agency was helping businesses.

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Don't Wait for the Flood

By Selena Maranjian September 4,

Here's a bit of insurance trivia for you: Nearly 25% of all claims the National Flood Insurance Program pays out are for policies in low- to moderate-risk areas. This statistic should serve as a reminder that even if you don't have a beachfront home, or a lovely cottage on a lake, or even a trailer down by the river, you might still want to make sure you've got sufficient protection against floods.

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Flood home in 20,000% excess hike

The excess on a Worcester couple's home insurance has leapt from £50 to £10,000 after the July floods.

The 20,000% excess increase comes after the living room and downstairs bathroom in Sue and Michael Joesbury's Hylton Road home were deluged by floodwater.

Mrs Joesbury said the renewal stated she would not be covered if temporary flood barriers were not put up.

The firm, MMA Insurance, said it wanted to ensure existing clients in high-risk flood areas could still be insured.

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Floods will not lead to higher premiums

By Richard Tyler

Last Updated: 1:55am BST 04/09/2007

The Government has received assurances from the insurance industry that businesses will not face significant hikes in premiums as a result of the recent floods.

John Hutton, the Secretary of State for Business and Enterprise, said that the chairman of Royal & SunAlliance, John Napier, as well as representatives from the Association of British Insurers (ABI), had indicated that premiums would not rise.

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Flood Insurance Workshops Announced

Written by Westchester.com

Monday, 03 September 2007

White Plains, NY - Questions about flood insurance and changes to flood insurance rate maps? Come to one of four workshops sponsored by the Federal Emergency Management Agency. Full Story

Insurance is a washout for flood victims

By Richard Gray, Science Correspondent, Sunday Telegraph

Last Updated: 12:17am BST 02/09/2007

Flood victims are being left with "worthless" home insurance cover after being blacklisted in the wake of the devastating floods that swept across the country this summer.

	Flood victims have been 'blacklisted' by insurance companies

Householders hit by the flooding in Yorkshire and Gloucestershire over the past two months have been presented by their insurance companies with massive excesses of up to £10,000 and new clauses that mean they will not receive a payout if temporary flood defences are not erected.

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Insurance is a washout for flood victims

By Richard Gray, Science Correspondent, Sunday Telegraph

Last Updated: 12:17am BST 02/09/2007

Flood victims are being left with "worthless" home insurance cover after being blacklisted in the wake of the devastating floods that swept across the country this summer.

Householders hit by the flooding in Yorkshire and Gloucestershire over the past two months have been presented by their insurance companies with massive excesses of up to £10,000 and new clauses that mean they will not receive a payout if temporary flood defences are not erected.

Hundreds of thousands of homes not hit by flooding are also facing premium increases as they are classed as being in high-risk areas

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Efforts to Change Flood Insurance Stall

By BEN EVANS

The Associated Press
Sunday, August 26, 2007; 2:00 PM

WASHINGTON -- Despite promising changes, Congress has shown little enthusiasm for taking the unpopular steps that experts say are necessary to fix the nation's main flood insurance program.

Recent flooding in the Midwest has brought the issue back to the forefront. Hurricanes Katrina and Rita, back-to-back storms in 2005, dispelled any notion that the insurance program was self-sustaining. They threw it roughly $20 billion into debt and called attention to major structural flaws

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Insurers warn on cover for flood plain homes

By Andrea Felsted and Jean Eaglesham

Published: August 20 2007 22:14 | Last updated: August 20 2007 22:14

Insurers warned on Monday they could be forced to take a harsher line on insuring new houses built on flood plains as they pressed the government to spend more on maintaining flood defences.

In a strongly worded letter to Hilary Benn, environment secretary, Stephen Haddrill, director general of the Association of British Insurers, claimed blocked drains and watercourses were partly responsible for the floods.

Mr Haddrill called for the government to think again about building housing on flood plains, and warned: “Insurers will in future scrutinise new developments more closely and warn of potential uninsurability more robustly.”

The industry trade body wants £150m spent on maintaining Britain’s flood defences on top of the £800m the government has already pledged to spend in 2010-2011. It is also seeking more details on how this promised investment will be spent.

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From Times Online

August 16, 2007

Flood defence

For the many British homeowners affected by the recent floods, the insurance headache is only just beginning.

According to the Association of British Insurers (ABI), the total cost of the floods is £3 billion, with 45,000 residential claims made. The main insurance worries for Homeowners are: am I covered, and will my premiums shoot up in future? Jonathan French, of the ABI, is reassuring on the first point: “If you have buildings and contents insurance, you will be fine. Damage caused by floods is a standard feature of these policies.”

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Aviva, Legal & General Shares May Climb as Flood Waters Recede

By David Clarke and Jon Menon

Aug. 10 (Bloomberg) -- Aviva Plc and Legal & General Group Plc, two of the biggest losers from this year's record U.K. floods, may lure investors now that their shares are trading at the lowest earnings multiples in five years.

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Aviva First-Half Net Falls 5.7% on U.K. Flood Claims (Update3)

By Jon Menon

Aug. 9 (Bloomberg) -- Aviva Plc, Britain's biggest property insurer, said first-half profit declined 5.7 percent after U.K. flood claims eroded revenue gains overseas.

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