UPDATE 1-US Senate panel backs flood insurance changes

By Kevin Drawbaugh
310 words
17 October 2007
08:47
Reuters News
English
(c) 2007 Reuters Limited
(Adds Dodd, Martinez, comments, byline, background)

WASHINGTON, Oct 17 (Reuters) - The U.S. Senate Banking Committee voted unanimously on Wednesday to reform federal flood insurance, but refused to follow the lead of the House of Representatives and expand the program to cover wind damage.

The House last month voted to overhaul the almost 40-year-old National Flood Insurance Program, which was badly crippled by heavy hurricane property damage claims in 2005.

The House bill would expand the program to cover wind damage, a response to outrage among some Gulf Coast homeowners over insurers' refusal to pay claims for hurricane damage.

Insurers have lobbied hard to block a wind expansion, arguing it would crowd them out of a viable business.

The Bush administration has pledged to veto the House bill.

The Senate bill strengthens the financial position of the flood program, improves flood mapping and extends the program for five years.

Committee Chairman Christopher Dodd, a Connecticut Democrat, said he did not want to add wind
coverage without knowing what it would cost.

He expects to get cost estimates from congressional researchers in about six months and to revisit the
issue. The flood bill goes next to the Senate floor for action.

"Wind insurance would have been a great addition to this program," said Sen. Mel Martinez, a Republican from Florida where hurricane damage is a sensitive political issue.

Martinez did not seek to amend the flood insurance bill in committee. "We're going to try to do something on the floor," he said, adding he was not optimistic of prevailing there.

Major insurers closely monitoring the congressional efforts include Allstate Corp , Travelers Cos Inc ,
Nationwide Insurance and State Farm.

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