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PIA National Says Senate Should Remove Wind Coverage From Flood Bill Passed by House

WASHINGTON, September 28, 2007 - The National Association of Professional Insurance Agents (PIA) said a provision of a flood insurance reform bill (H.R....
September 28, 2007

WASHINGTON, September 28, 2007  - The National Association of Professional Insurance Agents (PIA) said a provision of a flood insurance reform bill (H.R. 3121) passed by the House that adds windstorm coverage to the National Flood Insurance Program (NFIP) should be eliminated from the legislation when the Senate considers it.

The provision expands the flood insurance program to make available optional multiperil insurance coverage against personal property losses arising from windstorms.
 
"Adding wind coverage to the National Flood Insurance Program (NFIP) is a bad idea that we oppose," said PIA Senior Vice President Patricia A. Borowski. "It would result in uncertainty as to whether losses caused by wind should be covered by a policyholder's property policy, a state's wind pool, or the NFIP. The muddle created by this provision will increase disputes about coverage and prompt more lawsuits. It would hurt, not help homeowners."

"PIA is working with the Senate to fix this problem aspect of the bill, because Members of Congress must vote for real solutions, not another set of empty promises," Borowski said. "While well-intentioned, the functional mechanics of this provision are defective. We don't want it to appear that a solution has been provided that down the road only increases the confusion and expense to the purchaser," Borowski said.

Aside from the windstorm expansion provision, which has drawn a veto threat from President Bush, PIA is pleased with much of the rest of the bill, especially its multi-year reauthorization.

Passed 263-146 on September 27, the bill extends the NFIP through 2013. It also calls for a series of reforms intended to put the program on a more firm financial footing, including allowing the Federal Emergency Management Agency (FEMA) to increase policy rates up to 15 percent per year, up from the current 10 percent; eliminating subsidies now given to about 450,000 vacation homes, second homes and commercial properties built before 1974; and increasing the program's borrowing authority from $20.8 billion to $21.5 billion.

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America SM. PIA's web address is www.pianet.com.

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