Scalise: Wind Added to Flood Plan in Reform Bill Passed by House Financial Services Committee

Washington, DC -- Congressman Steve Scalise today announced that the House Financial Services Committee passed H.R. 1264, the Multiple Peril Insurance Act, and H.R. 5114, the Flood Insurance Reform Priorities Act of 2010. The bills now move to the House floor for a vote.

Scalise is the lead Republican cosponsor of H.R. 1264, which reforms the National Flood Insurance Program (NFIP) to create an option for property owners to purchase wind and hail coverage in addition to flood policies at actuarially sound prices.

“After Hurricanes Katrina and Rita, more than 7,000 Louisiana property owners were forced to sue their insurance companies in order to get them to pay for the damage caused by the storm,” Scalise said. “Many homeowners had both wind and flood coverage, yet had to go to court and prove if their damage was caused by wind versus flood. By combining all perils into one policy, Louisiana homeowners will have the peace of mind that their homes, businesses, churches, and schools will be protected in the face of catastrophic storm damage.

“In many instances, the NFIP paid for damages that should have been paid for by insurance companies, helping lead to the program’s insolvency. Creating a multi peril policy will shore up the NFIP, and make sure it is not subsidizing insurance companies like it did in the aftermath of Hurricane Katrina. Enacting these reforms to NFIP will also allow us to move forward with a five year extension and put an end to these short term patches that expire every few weeks that Congress fails to act.”

The Multiple Peril Insurance Act closes gaps in insurance coverage by creating a national insurance pool to spread risk and stop insurance companies from abandoning coastal areas immediately following severe hurricanes. It also includes loss of use coverage and increases the limits of coverage to $500,000 for residential structure coverage and $1 million for nonresidential structure coverage.

According to the Congressional Budget Office, the Multiple Peril Insurance Act is risk-based, actuarially sound, and will pay for itself. The bill passed the House Financial Services Committee by a vote of 40 to 25.

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Contact: Stephen Bell
202-226-9113