Americans for Smart Natural Catastrophe Policy today highlighted new opposition from adding wind coverage to the National Flood Insurance Program (NFIP) from Craig Fugate, President Barack Obama’s nominee to head the Federal Emergency Management Agency (FEMA).
Fugate stated his opposition to adding wind coverage to the NFIP through a written question by Senator Tom Coburn, a member of the Senate Committee on Homeland Security. His opposition is based on an existing private insurance market for wind coverage and the fallacy of adding it to an already debt-ridden program.
Americans for Smart Natural Catastrophe Policy agrees with Fugate’s opposition to this proposal based on his reasoning provided below.
“We agree with FEMA Director-Designate Craig Fugate that adding wind coverage to the NFIP is a bad idea. Congress should intead focus its attention and resources on making communities more resilient to storms by investing in sthe protection and restoration of wetlands, floodplains, and barrier islands,” said Rebecca Wodder, President of American Rivers. “These cost-effective efforts will help protect communities while also discouraging needlessly risky development in the future.”
“Director-designate Fugate recognizes the National Flood Insurance Program is already financially struggling and the idea of adding insurance for wind storms would make it even more precarious,” said David Conrad, Senior Water Specialist for the National Wildlife Federation. “Particularly given the likelihood of more severe storms and increasing sea-levels due to climate changes, FEMA should place its emphasis on helping people and their communities reduce their vulnerabilities to flood and wind damages, rather than make the taxpayers become an insurer for windstorms as well as floods.
“Craig Fugate is absolutely right. Adding wind coverage to NFIP would cost taxpayers enormous amounts of money, distract FEMA from its core mission, and encourage environmentally destructive development. He’ll be a terrific FEMA director and I look forward to his Senate confirmation.” – Eli Lehrer, Senior Fellow of the Competitive Enterprise Institute
Question: Representative Gene Taylor of Mississippi has reintroduced legislation in the House of Representatives that would add wind coverage to the National Flood Insurance Program (NFIP). Where do you stand on adding wind coverage to the NFIP?
Fugate Answer: I oppose adding wind insurance coverage to the NFIP for a number of reasons:
• Coverage is available in the private sector and through State wind pools. Property owners are served by the private market, which provides catastrophic windstorm coverage without the need for Federal aid. I oppose extending the Federal government’s role and increasing its liability for an insurance program that is readily available in the private sector and through state insurance plans. Many carriers in Florida have told the State’s insurance regulator that they would write the wind policies of insures withdrawing from the state.
• Voluntary Federal wind coverage would create significant problems involving coordination of benefits, and adversely affect competition and selection among the various public and private wind programs.
• Wind coverage would greatly increase the NFIP’s exposure to catastrophic risks at a time when the program has a growing debt and accrued interest of over $19 billion.
• The legislation requires federal wind insurance to be actuarially sound, as it should, hence, the insurance offered through a Federal program will not be less expensive than what is available in the private insurance market.
• Unless communities adopt the international building codes without amendments, FEMA would be forced to review thousands of community building codes every three years and continuously monitor them to ensure compliance.
• Building codes and standards do not dictate land use and zoning requirements, which have always been reserved for States to decide what is appropriate; and the term ‘windstorm’ includes any hurricane, tornado, cyclone, typhoon, or other wind event, yet American Society of Civil Engineers Minimum Design Loads for Buildings and Other Structures (ASCE 7-05) and the Nation’s model building codes do not address tornadoes.
About Americans for Smart Natural Catastrophe Policy American for Smart Natural Catastrophe Policy is a national coalition made up of a diverse set of voices united to support environmentally-responsible, fiscally-sound approaches that promote public safety. The Coalition strongly opposes legislative proposals that encourage people to build homes in hurricane-prone, environmentally-sensitive areas by creating new programs that directly or indirectly subsidize their homeowner’s insurance.