A congressman from the Gulf Coast has re-introduced multi-peril legislation designed to restore the homeowners insurance market in coastal areas, where insurers have been writing fewer polices since Hurricane Katrina in 2005.

Rep. Gene Taylor (D-Miss.) wants to amend the National Flood Insurance Program to permit homeowners the option of buying wind and flood coverage in one policy. Two years ago, the bill won bipartisan support in the U.S. House of Representatives.

While America has focused on the home mortgage crisis “another homeowner financial crisis grows exponentially out of the national eye: the homeowner insurance crisis,” Taylor said in a prepared statement.

“Apparently, the insurance industry no longer wants to cover people for wind damage in coastal America or will not provide that coverage at a cost that is reasonable,” Taylor said. “Throughout coastal America, property insurance companies have dramatically increased premiums on existing policies, cancelled existing policies, or have stopped writing new policies altogether for our nation’s home and business owners. The Multiple Peril Insurance Act will solve this problem. It will also stimulate the economy throughout coastal America, particularly here in the Katrina area of the nation.”

Taylor said the crisis in insurance availability extends from Texas to Florida, and along the East Coast from Florida to New Jersey and New York.

“As we found out after Katrina and our fellow Texans are finding out now after Ike and Gustav,” Taylor said, “short of home and business owners hiring lawyers and engineers to take their carriers to court, insurance companies routinely and deliberately fail to pay on legitimate hurricane-related wind claims. No one should have to go through this. It isn’t fair to American homeowners, and it must end.”

If passed by Congress, the bill would discourage insurance companies from withdrawing from writing policies in the nation’s coastal marketplace. They could return to coastal communities to sell fire, theft, and liability coverage, and excess coverage above the $500,000 or $1 million federal policy limits, according to Taylor.

The bill would reduce future property damage by requiring participating communities to adopt International Building Codes. Residential coverage limits would include $500,000 for a structure, $150,000 for contents and loss of use, according to the bill. Non-residential coverage limits would be $1 million for the structure, and $750,000 for contents and business interruption.

Windstorm insurance would be available only where local governments adopt and enforce the International Building Code or equivalent building standards.

Premiums for wind coverage would be risk-based and actuarially sound, according to the bill. The federal multiple peril insurance program will spread the risk geographically to form a much more stable insurance pool than state wind pools that cover a much smaller area through which it spreads the risk, the bill states.

Taylor said the measure would “benefit taxpayers by providing for prompt and full payment for wind and water damage.”

That will reduce the need for FEMA trailers, housing vouchers, subsidized loans, tax deductions, and other federal assistance. The bill requires premiums to be risk-based and actuarially sound so that the program pays for itself. CBO scored the bill as budget neutral.