The Multiple Peril Insurance Act of 2007 calls for amending the federal law which created the National Flood Insurance Program (NFIP) in 1968. If enacted, H.R. 920 would give the NFIP the authority to sell policies covering real and personal property losses arising from windstorms, as well as floods, under certain conditions. Since its inception almost 40 years ago, the NFIP has only sold policies offering coverage for flood-related losses.
“The National Flood Insurance Program paid its policyholders more than $16 billion in Hurricane Katrina-related losses, a dollar amount higher than what the NFIP disbursed over the course of the previous three-plus decades combined,” Dr. Hartwig said. “The Multiple Peril Insurance Act of 2007 would increase dramatically the NFIP’s exposure to catastrophic losses.” He pointed out that private insurers paid out more than $40 billion to policyholders for damages from Hurricane Katrina; most of that amount was related to wind damage.
About 14 percent of U.S. homes are covered by National Flood Insurance Program policies but those homes are situated primarily in coastal communities, where real estate values are often significantly higher than inland properties.