Congress wants to know whether private insurers overcharged NFIP
As the debate over extending TRIA continues, Congress continues investigation into whether private insurers overcharged flood insurance program
Congress wants to know ehether private insurers overcharged the National Flood Insurance Program (NFIP) for Hurricane Katrina damage. Two House subcommittees are holding a joint hearing this week on the “Insurance Claims Payment Processes in the Gulf Coast after the 2005 Hurricane.”
The Biloxi, Mississippi SunHerald’s Anita Lee reports that a subcommittee of the U.S. House Homeland Security Committee, chaired by Representative Benny Thompson (D-Mississippi), will join a subcommittee of the House Financial Services Committee, chaired by Representative Barney Frank (D-Massachusetts). Frank’s subcommittee already has held one hearing on the issue.
“It is clear that the 2005 hurricanes (Katrina and Rita) exposed serious flaws in the insurance coverage and claims adjustment processes,” said Financial Services subcommittee chairman Mel Watt (D-North Carolina). “This second hearing will continue responsible efforts by Congress to get the facts we need to insure that those flaws are corrected and that victims of future catastrophes are better protected.”
Representative Gene Taylor (D-Mississippi), who lost his Bay St. Louis home to Hurricane Katrina, called for the investigation and has been instrumental in compiling evidence. Taylor sued his insurer, State Farm Fire and Casualty, for denying his claim for wind damage. The lawsuit has been settled, but Taylor believes private insurers who service flood policies and claims blamed water for damage caused by wind, which the private companies are responsible for covering.
Taylor said: “I am very grateful to Mel Watt and Chris Carney (D-Pennsylvania; Homeland Security subcommittee chair) for continuing the investigation of insurance practices following Hurricane Katrina. NFIP allows insurance companies to handle flood insurance claims backed by the federal government. Members of Congress, Gulf Coast homeowners, and federal taxpayers need to know whether insurers honored their contractual obligation to provide fair adjustments of wind and water claims.”
