Executive Session
Floor Speech
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Mr. WICKER. Mr. President, during this brief pause in the debate on the Supreme Court nominee, I rise to call to the attention of Senate Members my introduction of S. 3672, the Coordination of Wind and Flood Perils Act of 2010.
This month is, of course, the fifth anniversary of Hurricane Katrina. We are still rebuilding on the coast, and we are still rebuilding in many areas of the gulf, in the South, as depicted on this map.
Two weeks ago, I attended the opening of a municipal complex and library in the historic town of Pass Christian. The fact that we are just getting the money and just getting this library and city all rebuilt after 5 years is testimony to the extent of the destruction and the difficulty of funding projects like that. This is true in the public sector, and it is also true in the private sector.
But one of the greatest impediments to rebuilding, and one of the main reasons Katrina is still not over for the people of Mississippi and other areas of the gulf is the lack of affordable insurance. This is true in Mississippi, and it is also true from Texas all the way through the gulf, south, down to the tip of Florida, and on up through the New England coastal States. Anywhere there is coastal exposure there is a problem with affordability and availability of insurance.
I have had quite a number of visits to the coast in recent weeks, particularly in the last 100 days because of the oilspill. The recovery there is going to be a challenge.
There will be speeches later on this month commemorating the anniversary and discussing the heroism and the resilience and the determination of the people of the coast. All of this will be appreciated and necessary, but the truth is one of the best things that could be done for the gulf coast area--not just my State of Mississippi but in the entire area--is to resolve the issue of wind insurance versus flood insurance, and that is what S. 3672 is all about: coordinating the coverage between wind and flood perils coverage.
Of course, for people in this area, for people in my State of Mississippi, you need hazard insurance, you need fire insurance, as does everyone, you need wind insurance, and you need flood insurance. Back in 1968, that was the year of Hurricane Camille. It also was the year it became apparent to this Congress that something needed to be done at the Federal level to cover water damage. Hence, the National Flood Insurance Program was established in 1968. Since that time, Americans have been able to get flood insurance through the NFIP. Actually, in 1973, this Congress in its wisdom made such coverage mandatory for people mortgaging property in flood zones.
Let's fast forward to 2005, the year of Hurricane Katrina. Many victims who needed it didn't have flood insurance. One of the reasons they didn't have flood insurance is that the flood zone maps were wrong. I hope to a large extent this has been corrected. It is supposed to have been corrected now, and people in flood zones who have mortgages are required to have it. Oftentimes they cancel those policies, and that is something we need to attend to also, but that insurance is available.
The problem is wind insurance. The private insurance coverage for wind damage has pretty much left the coastal areas of many of our States in the eastern part of the United States. So we have this situation now where a homeowner needs flood insurance through the National Flood Insurance Program. They need their own hazard insurance that they get through their local broker. Then, they probably have to resort to the State wind pool, a State program, because private wind insurance is not available to them.
Another problem we had in 2005 after Katrina is that many homeowners found themselves caught in the middle between the issue of whether it was water damage in connection with the hurricane that caused their property loss or whether it was flood damage in connection with the hurricane that caused the loss. After hurricanes such as Katrina, if a homeowner has wind and flood insurance, the homeowner often has to prove in court whether it was wind or water that caused the damage. This is unacceptable. Let me emphasize this: Individuals who had all the appropriate insurance--wind and water--were, in many instances, caught in the middle and forced to go to court to watch the insurance carriers fight among themselves. My legislation would remove the burden of determining flood or wind loss allocation from the property owner and put it where it belongs--a decision to be made between the insurers.
If my bill becomes law, insurance companies, including State-run wind pools and the National Flood Insurance Program, would have to pay a claim as soon as possible after the hurricane. If there is a dispute, each would pay 50 percent. The homeowner would be paid for the loss while the parties responsible for paying the claim would work out the details.
My legislation--and again, it is S. 3672, the Coordination of Wind and Flood Perils Act of 2010--would prevent homeowners from having to go to court to determine what portion of the damages were caused by wind and what portion by water. This should not be part of the duties of the homeowner. Under my legislation, if there is a dispute between the parties responsible for paying the claim, the insured would be compensated immediately and the dispute between the insurers would be resolved by arbitration.
This is only a small step. It doesn't answer the whole problem. I still support the concept of putting wind coverage under the National Flood Insurance Program on a voluntary basis, as my amendment would have done in 2008. It is an amendment that has passed the House of Representatives and it is known as the multi-peril concept. That did not get majority support in the Senate and is, frankly, unlikely to get that support in short order. They are having trouble with that concept in the House of Representatives, but I wish to emphasize that I still support the multi-peril concept. This is a step. It puts us on the right track and it removes the wind and water debate.
I would suggest that my friends in the Senate look at this bill. I invite them to become cosponsors, and I hope we will be able to add this simple amendment to the law in short order.
I thank the Presiding Officer and I yield the floor.
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