Despite warnings from the Bush Administration, as reported here that it would not support any legislation expanding the National Flood Insurance Program (“NFIP”) to include windstorm coverage, the House Financial Services Committee approved the Flood Insurance Reform and Modernization Act of 2007 (H.R. 3121), which contains just such an amendment to the NFIP.
The vote, which took place late Thursday, July 26th, was largely on party lines. This bill includes the Multiple Peril Insurance Act of 2007 (H.R. 920), reported about here and here, and revisions to the NFIP to restore financial solvency.
The Flood Insurance Reform and Modernization Act of 2007 would allow the NFIP to offer multiple peril policies in areas where the local government adopts and enforces new building codes designed to minimize wind damage. Duplication of coverage under the multiple peril insurance and flood insurance programs would be prohibited. The policy limits for any insurance procured under the NFIP for residential properties would be $500,000 for structures and $150,000 for contents and loss of use, and for commercial properties would be $1,000,000 for structures and $750,000 for contents and business interruption.
As always, we will continue to monitor the progress of this reform and provide updates on InsureReinsure.com.