According to Rep. Gene Taylor (D-Miss), a shortfall in such coverage currently exists, stemming from private insurance companies covering wind damage and the federal government covering water damage, which results in a bias by insurers that administer the flood program to label all damage as “water.” Taylor, who lost his own home to Hurricane Katrina, affirmed that the expanded coverage “really helps people in all coastal areas.”
The vote, which was largely along party lines, represents widely diverging opinions. While some Committee members such as Chairman Barney Frank (D-Mass) believe the expanded program would pay for itself through actuarially determined premiums, Republican members argue that expanding the program coverage would expose the federal government to major liability at a time when the insurance fund is essentially bankrupt. A massive number of Hurricane Katrina and Rita claims forced the federal flood insurance program to borrow $17.5 billion more than it received in premiums.
According to Frank, the bill should be ready to proceed to the House floor for a vote in September.