A better route for storm insurance

The most interesting thing about a new law governing windstorm insurance is it acknowledges, in a way, what some close observers have been arguing for years — having wind and flood insurance in separate policies makes no sense.

The new rules, set out in a state law that goes into effect Sept. 1, mandate certain property in so-called velocity zones be insured against flood damage in order to be insured against wind damage through the Texas Windstorm Insurance Association.

The law applies to houses and commercial buildings in beach-front areas vulnerable to storm-driven waves “constructed, altered, remodeled and enlarged” on or after Sept. 1. Locally, those areas are Galveston’s West End and most of Bolivar Peninsula.

Apparently, not even people at the windstorm association charged with administering the law know yet what it means for houses destroyed by Hurricane Ike. Can a house consisting of eight pilings be merely repaired?

The law aims to prevent in the future the conflict going on now among policy holders and the windstorm association about whether Ike damage was caused by wind or water. If wind was the cause, the association is liable. If water was, the association is not liable.

Hundreds have sued the association over that issue. Many more are feeling ripped off because they paid windstorm premiums for years, but were told all their Ike damage was caused by storm surge, which is not covered.

Some of those people are trying to play the system. Some honestly didn’t know they needed National Flood Insurance Program policies to be covered for flood damage. Some claim to have been misled by insurance agents.

Whatever the merit or lack of it among the lawsuits, the two-policy system has caused a lot of confusion and anger. Not to mention absurdity as competing engineers inspect piers and pretend they can divine what share wind and water had in removing the house from them.

Soon, we may get, as people in Mississippi have, the dark comedy of those engineers testifying about whether the nails in a hunk of debris were bent by wind or water.

There is a better way to do this.

The U.S. House this fall probably will begin debating reform of the National Flood Insurance Program. Among those proposed reforms are provisions creating a multi-peril insurance policy that would cover major hurricanes, floods and earthquakes** — things that don’t happen all the time but are catastrophes when they do.

That would mean one policy, one adjuster, no questions about wind or water.

It also would spread the risk from a collection of chronically underfunded and almost-bankrupt state pools into a national pool large enough to actually absorb the risk, and probably be cheaper for the taxpayers in the long run.

The only people apt to lose in the change are the only people actually benefiting from the current system — tort lawyers and reinsurance underwriters.

* Gulfport Office 2424 14th Street Gulfport, MS 39501 Phone: 228.864.7670 Fax: 228.864.3099 View google map	Bay St. Louis Office 412 Hwy 90, Suite 8 Bay St. Louis, MS 39520 Phone: 228.469.9235 Fax: 228.469.9291 View google map	Ocean Springs Office 2900-B Government St. Ocean Springs, MS 39564 Phone: 228.872.7950 Fax: 228.872.7949 View google map	Hattiesburg Office 701 Main Street, Suite 215 Hattiesburg, MS 39401 Phone: 601.582.3246 Fax: 601.582.3452 View google map	Laurel Office 527 Central Avenue Laurel, MS 39440 Phone: 601.425.3905 Fax: 601.425.3906 View google map	Washington Office 2269 Rayburn HOB Washington, D.C. 20515 Phone: 202.225.5772 Fax: 202.225.7074 View google map
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