Good news is always welcome - particularly good news about insurance - and Anita Lee delivers with this story in today's Sun Herald.
Many Mississippians who suffered losses from Hurricane Gustav will feel less pain than they did three years ago, and not only because the storm was weaker than Katrina.
Before Katrina, many residents were unaware that tidal surge from a hurricane was considered flooding. They thought their homeowners' insurance policies covered damage from wind and tide. Attorneys challenged insurance flood exclusions for hurricanes, but the courts upheld policy exclusions for wind-driven surge.
[caption id="attachment_3637" align="alignright" width="212" caption="Increase in NFIP Participation "]
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The Mississippi Insurance Department has urged consumers to buy flood insurance, as did cities such as Biloxi. Katrina and the flood insurance campaigns that followed sold many Coast residents on flood policies. There are around 35,000 more flood policies in the state than before Katrina.
"That is a real good increase," said Ed Pasterick, senior policy advisor for the National Flood Insurance Program. "I would say that's a very good sign that there were that many policies sold after Katrina and they are still in force. Katrina really did heighten the awareness in Mississippi, probably more than anywhere else."
Pasterick said people will often buy insurance after a flood, but then drop the policy within a couple of years.
Considering the average loss claimed under NFIP coverage, it's hard to imagine a better deal but not at all difficult to understand the program's debt.
The average flood insurance policy costs $500.
NFIP is hoping Congress will forgive what is currently a $16 billion debt from Katrina. The interest alone, Pasterick said, costs $800 million a year
We've made the case that it's impossible for the program as it's structured to pay back that amount of money," Pasterick said. "As long as we have to pay that much in interest, you're always on the edge of having to borrow more."
However, with the election approaching, Congress might only reauthorize the NFIP on a temporary basis and address more substantial issues next year. Taylor, on the Coast cleaning up after Gustav, could not be reached to comment.
Debt forgiveness is part of an NFIP bill pending in a conference committee. U.S. Rep. Gene Taylor, D-Miss. and a conferee, is lobbying to add wind insurance to the program so that Coast residents would be covered for both perils under one policy.
Original source: http://slabbed.wordpress.com/?p=3640
