Post-Katrina Insurance Issues Surrounding Water Damage Exclusions in Homeowners' Insurance Policies [February 27, 2007] [open pdf - 183KB]
From the Summary: "In the aftermath of the devastating 2005 hurricane season, three broad policy issues for the 110th Congress have emerged related to post-Katrina economic uncertainties: (1) the massive insured and uninsured property losses and their impact on Gulf Coast property insurance markets and rebuilding after Katrina, (2) assertions that insurers have shifted the cost of damages onto the federal flood program and U.S. taxpayers, and (3) unreliable government flood maps that are used in decision making by homeowners for purchasing insurance. Post-Katrina insurance claims litigation and the economic uncertainty it generates for consumers and insurers raise concerns about the volatility in the legal environment in terms of post-event judicial interpretations in the scope of insurance coverage. Questions include What should be done to mitigate the economic consequences of future floods? Are the American people and policymakers ready to address perceived weakness in the U.S. floodplain management policy? Should the nation forgo development of its floodplains (a new policy initiative) or continue along the current path embodied in the NFIP? Finally, insurance analysts have observed that a large percentage of those eligible to buy federally subsidized flood insurance do not. What could or should be done about this? These and other policy questions might be examined in the 110th Congress. This report will be updated as events warrant."
CRS Report for Congress, RL33892