On the heels of the president’s trip to New Orleans, Rep. Gene Taylor (D-Miss.) is calling for reform to the National Flood Insurance Program, including the addition of wind coverage.

Gene Taylor

Earlier this month, President Barack Obama signed an extension of the program through Oct. 31, but in a letter, Taylor urges the Administration to engage “more actively in reforming the National Flood Insurance Program, providing for better disaster insurance coverage, and improving other disaster response and recovery programs.”

In his letter, Taylor points out that the president will not visit the Mississippi Gulf Coast, ravaged by winds gusting 140 to 150 miles per hour during an eight-hour period on August 29, 2005 from Hurricane Katrina.

Immediately after the hurricane, Taylor notes that some of the largest insurance companies – including State Farm, Allstate, Nationwide and USAA – were not going to honor their policies, blaming most of the destruction on flooding and not examining the impact of wind damage.

“The insurance tactics not only overbilled the federal taxpayers through the National Flood Insurance Program, but also resulted in billions of dollars of additional federal disaster assistance to assist the displaced residents during their long insurance disputes,” Taylor noted. “Most homeowners whose wind insurance claims had been denied eventually reached some settlement with their insurers after years of delay, but in the meantime, thousands of displaced residents were dependent on federal assistance.”

Taylor said that with homeowners unable to rebuild because of uncovered losses and lengthy insurance disputes, federal taxpayers “continued to subsidize cities, counties and schools that could not recover without their local tax base.”

The damage caused by Hurricane Katrina along the Mississippi Gulf Coast in 2005 should teach that “coastal residents need to be able to buy hurricane insurance that will cover hurricane damage without gaps in coverage, without lengthy disputes over the cause of damage, and without inherent conflicts of interest that allow insurance companies to shift liabilities to taxpayers,” Taylor said.

Taylor has proposed the Multiple Peril Insurance Act, which would allow homeowners to buy a single policy from the NFIP covering wind and flood damage. 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 the legislation.

The bill was included in the Flood Insurance Reform and Modernization act that died in Congress last year.

“I sincerely believe that an ounce of prevention is worth a pound of cure, but only if the prevention measures are effective, efficient, and accountable,” Taylor concluded. “In the case of the flood program, its effectiveness is heavily dependent on the integrity of levees and other flood control structures, the accuracy of the flood risk maps, and local enforcement of building codes and flood plain management standards. All of these factors call for better federal administration and oversight of contracts.”

Hurricane Katrina caused 1,836 confirmed deaths, left more than 700 people missing and led to damages of more than $81 million to the entire Gulf Coast area.