There’s at least a little bit of good news for the homeowners and residents facing flooding along the Mississippi River. According to Insurance Journal, a House committee approved legislation that would extend the federal flood insurance program for five years. It also includes a plan for financial reform. This legislation would mean the National Flood Insurance Program will be around until 2016 and includes a plan to increase premiums, improve flood maps and receive more public input.

The program is set to expire this fall and has been extended on a short term basis several times. It is currently in more than $17 billion in debt. “Flood waters across the South and Midwest are on the rise, and so is the debt owed by this program,” Rep. Judy Biggert, R-Ill, told Insurance Journal.  “We need to put the National Flood Insurance Program back on stable financial footing so that it can provide homeowners with reliable coverage without putting taxpayers on the line for billions in losses.  This legislation will give the program long-term stability, help draw better flood maps, and initiate actuarially sound pricing.”

While two new option coverage options were rejected, many people supported the move to extend the program. “A five year extension is of the utmost importance, as are reforms to put the program on sound financial footing,” Charles Symington, Big “I” senior vice president of government affairs, told Insurance Journal. “We are especially grateful that the Committee rejected an amendment that would have removed the inclusion of optional business interruption and additional living expenses coverage as these provisions will better safeguard consumers against flood loss.”

Now the program will move to the full House and Senate for a vote. Sponsors are hopeful that it will be passed before the end of September when the current program expires. “Given the current flooding taking place on the Mississippi river, it is especially critical to get a long-term extension of the program in place so that this debate can move beyond Congress and residents in flood-prone areas can have the stability in the program they so desperately need to insure their homes and businesses,” Leigh Ann Pusey, president and CEO of the American Insurance Association, told Insurance Journal.

The Federal Emergency Management Agency issued a warning to residents of Louisiana to prepare for flooding and keep flood insurance documents safe. FEMA is encouraging residents to follow the direction released by local officials in terms of evacuations.
“Last Friday, May 6, 2011, President Obama issued an emergency declaration specific to 22 parishes throughout Louisiana,” said Federal Coordinating Officer Gerry Stolar in a news release. “That equates to one-third of the communities throughout this state currently at risk for potential flooding. FEMA is asking Louisiana residents living in the declared parishes to take measures now to best protect their lives and properties, including knowing the facts about flooding and safeguarding important documents, such as insurance policies.”

Tornadoes in the Carolinas and fires in Texas are making for a busy time for insurance companies. In Texas, Nationwide Mutual Insurance Co and Allied Insurance have representatives and agents ready to assist customers with damage claims due to wildfires or hailstorms that have recently impacted the state.

According to the companies, the Nationwide claims hotline is 1.800.421.3535. That number will help policyholders reach their local agent. Allied Insurance customers are asked to call the Allied claims hotline at 1.800.282.1446. “Right now our claims numbers are moderate, but we expect them to increase as customers have an opportunity to assess the damage caused by the wildfires burning in the Dallas/Fort Worth area as well as the recent severe hailstorms,” said Terrance Williams, regional vice president of Nationwide’s Central Plains Region, in a news release. “We’ve taken steps to ensure a quick response to customers who report claims from these events.”

In the south where tornadoes ripped through last Saturday, adjusters have descended on the area to collect claims. As of Wednesday morning State Farm Mutual Automobile Insurance Co had received about 400 claims from Virginia homeowners and 2300 in North Carolina, according to The Virginia Pilot. A State Farm spokesman told the newspaper that most of the Virgina claims had come from Gloucester County where a storm stripped an 8 1/2 mile path of homes and businesses. “We do expect both of those numbers to increase as people get power and get themselves collected,” spokeswoman Amy Preddy told the newspaper. “Most of them are homeowners claims due to wind damage, falling trees. But we have seen some auto claims resulting from hail damage.”

Faulty drywall is causing some Florida homeowners to lose their insurance coverage. According to UPI.com, Citizens Property Insurance announced it won’t cover homes that have extensive damage caused by sub-par Chinese drywall. According to reports, the drywall smells bad, corrodes metal and causes other issues.

Citizens Property Insurance, a government entity and non-profit, already dropped coverage on two homes that were vacant. UPI.com says that 58 homes have filed claims for having the bad drywall over the last year and a half according to the insurance company’s spokeswoman Christine Ashburn. Several other insurance companies have denied coverage for similar issues with drywall.

Ashburn says that it’s the company’s policy to never cover existing damage. “If a home has existing damage, we will not provide coverage for the property unless the damage is repaired, or we are provided with proof of intent to repair the property,” Ashburn told UPI.com. The company’s move to pull coverage from some homeowners experiencing drywall problems is prompting questions from lawmakers. “I am concerned about the effect of Citizens’ nonrenewal or cancellation decision on the tens of thousands of Floridians suffering through the nightmare of tainted drywall, especially those who are unable to find affordable coverage in the voluntary insurance market,” Sen. Bill Nelson wrote according to the Sun Sentinel.

Florida homeowners have a lot to worry about: the threat of hurricanes, low home values and huge insurance costs. According to the Herald-Tribune, Florida ranks as one of the most expensive places in the world to insure a  home. According to reports, in Monroe County, Florida rates have come in as high as $13,000 a year to insure a $150,000 home. That means insurance will cost more than the mortgage itself. Experts say insurance rates have doubled and even tripled in the last five years in other counties. “How much longer will I be able to afford to live here?” Scott Snyder, a Sarasota homeowner, said to a reporter. Snyder says  since 2003 he has bounced between four insurers and watched his premium nearly double from $1,350 to $2,644.

The Herald-Tribune says homeowners are paying more for less. Things like pool cages and sinkhole coverage was once included but now is not and officials say it’s partly because tired homeowners have stopped complaining. “People have accepted, sadly, the premiums they are now paying and are not yelling and screaming as they were in the past,” Sen. Mike Fasano, a New Port Richey Republican, told the  newspaper. “But that doesn’t mean we don’t have a crisis right now.”

Many large insurance providers have left the state, prompting the arrival of smaller start-up insurance companies. While the new companies are providing a service, it’s coming at a bigger cost to homeowners. According to the Associated Press, 2011 will be no different. More than 4 million Florida homeowners will see rate hikes that were recently approved by state regulators to the tune of $718 million, despite the fact that no hurricanes have hit the state in five years.

Spokeswoman for New York-based Insurance information Institute, Lynne McChristian, offered up three reasons for increased insurance rates in some parts of Florida. The first is that there have been an increase in new claims from Hurricane Wilma. In Florida, policyholders have up to five years to file a claim and since the fifth anniversary of Hurricane Wilma just passed more homeowners were filing claims. McChristian says there are also more sinkhole reports which is forcing higher payouts from insurance companies. Finally she told TCPalm.com that some insurance companies are responding to changes in hurricane mitigation discounts by increasing rates. “Our state is exposed to more catastrophic loss than any other state,” McChristian told TCPalm.com. “Our population has grown and the building boom of the past few years put more people and more property in areas of the state that are most vulnerable to hurricane damage and storm surge. A single major catastrophe in Florida can bring losses as high as $100 billion and the insurance industry has to prepare for that.”

Most states require anyone who owns and drives a vehicle to have liability auto insurance. Perhaps this is why liability insurance is the foundation of insurance policies in most states in the USA. What does liability insurance do?

If you have an accident and it is determined that you are at fault, it will pay for any sort of physical injury and medical expenses and for any damage to the property of the other people in the accident. This includes repairing or replacing the items you may have damaged or destroyed in the accident. Liability insurance does not pay for your own car’s damage, your injuries and/or your property damage. It will pay for the legal fees for you and also for anyone else who is included on your policy. It will also pay to bail you out of jail if things get a bit testy at the accident scene!