Sen. Mikulski Airs Maryland’s Concerns with Flood Plan

March 30, 2004

Senator Barbara A. Mikulski (D-Md.) testified at a Senate Committee hearing about the problems many Marylanders experienced with National Flood Insurance Program (NFIP) in the aftermath of Hurricane Isabel. The Senate Banking Committee’s Subcommittee on Economic Policy is currently reviewing the NFIP as a first step in the program’s reauthorization. Senator Mikulski offered the experiences of Marylanders to illustrate areas where the program should be improved.

“After Hurricane Isabel struck last fall, I went on a statewide tour of Maryland to see first-hand the devastation caused by the storm,” said Senator Mikulski. “I heard heartbreaking stories from people who lost their homes and their businesses.

“People are telling me they don’t understand what their flood insurance pays for. They didn’t know, for example, that the contents of their homes weren’t covered without a separate policy. When they asked their insurance agent to explain things to them, they couldn’t get a straight answer because the agents don’t really know what these policies cover or how they really work. Repair estimates were routinely low-balled. No one was told how to appeal a claim decision, or even if an appeal was possible.”

She said the NFIP “wasn’t there for these people the way it should have been.”

Senator Mikulski, along with Senator Paul Sarbanes (D-Md.), the ranking member of the Banking Committee, made four recommendations for improving the NFIP:

1. Full information and disclosure of flood insurance policies: The NFIP must provide a clear and understandable outline of policies so policyholders understand their coverage.

2. Better training for insurance agents: Agents who sell flood insurance must understand what they are selling and how claims are processed so consumers can get the answers they need.

3. A straightforward formal appeals process: There must be a clear way for policyholders to appeal their claims awards or appraisals of loss.

4. Adequacy of payments: Consumers need assurance that the insurance they pay for will pay the real world cost of repairing the damage and replacing their loss.

There have been 6,105 insurance claims filed in Maryland for damage caused by Hurricane Isabel, totaling $128,428,437.

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