It has been over two years since hurricane Katrina devastated Louisiana and Mississsippi. With many homes still not rebuilt, demolished or renovated, it raises the big question about flood insurance and whether or not there should be reform in the insurance industry.

In the September 2007 issue of Mortgage Banking it is reported that the decision of the U.S. House Financial Services Committee to reauthorize and reform the National Flood Insurance Program by moving the Flood Insurance Reform and Modernization Act of 2007 in late July and that the decision would curtail the coverage for second homes while adding for windstorm damage. However, the committee explained that the bill would give advantage to small business owners.

Mortgage companies require flood insurance for homes located in flood-prone areas, but homeowners in lower-risk areas may also consider coverage to protect their property, according to Terri Cullen of The Wall Street Journal. Average premiums for a flood insurance is about $600 a year, but those in high risk areas can pay as much as $5,400 a year. Tenants in low-risk areas may pay about $200 a year or $2,200 for high-risk zones. Leading to the fact that it is very expensive to those who really need it, spawning debate as to whether the government should step in and create legislation for flood insurance in those areas that desperately need it such as we`ve seen along the Gulf Coast.

Heightened interest in the natural catastrophe policy is a plus for supporters of the optional federal charter. Congress has dealt with several natural catastrophe related matters, including the House Financial Services Committee`s vote to expand the National Flood Insurance Program to cover wind risks. A definite win for those who need it.

National Underwriter / Property & Casualty Risk & Benefits Management`s Susanne Sclafane reports of the decision of the New Orleans federal appeals court on the need for the homeowners to purchase the National Flood Insurance Program (NFIP) in New Orleans, Louisiana. It is triggered by the claims on damages caused by the Hurricane Katrina. Justin Roth, senior federal affairs director of the National Association of Mutual Insurance Cos., said that the flood maps of the nation needs an update to make sure that claims are really due to floods to prevent other claims.

With the U.S. House of Representatives approving the H.R. 3121 legislation that intends to expand the National Flood Insurance Program (NFIP), by a vote of 38-29, it aims to offer coverage for wind damage as well. It also includes provisions that would require the Federal Emergency Management Agency to revise the country`s flood maps by 2010 ,and terminate the subsidies for structures built before NFIP`s establishment, which Roth feels is vital.

Flood insurance is vital those homeowners and renters along our country`s coastline and those near larger bodies of water. Although many more bills remain being debated in Washington in regards to flood reform, one thing is clear, for those that need it most, reform can not happen quick enough.

By: Michael C. Podlesny

Chad asked:

When Cary Hicks lost his group health insurance earlier this year, he was floored by how much an individual policy could cost him because he is a diabetic.

“I was looking for anything,” said Hicks, who runs a small construction company. “I didn’t have insurance. I couldn’t afford any.”

That’s when Hicks discovered a new public health insurance program created by the North Carolina legislature. He now pays $550 a month in premiums — not cheap, but one-third of what a similar policy would have cost him in the private market.

As Congress debates how to overhaul the nation’s health-care system, North Carolina has dipped its toe into the public-option debate. Those who can’t find affordable health insurance from private companies because they have cancer, heart disease or other ailments now have the option of buying insurance from a high-risk pool set up by the state.

The program, called Inclusive Health, is little known. It has enrolled 2,050, only half of the number expected. But an estimated 1.4 million North Carolinians don’t have health insurance.

Inclusive Health is aimed largely at helping middle-class people who wake up one morning and find themselves without health insurance. Enrollees have either been turned down by private insurance companies, have lost their jobs or don’t have access to Medicare or Medicaid.

Hicks, 54, of Garner, said he had never given much thought to health insurance before this year. He was covered under his wife’s policy until January, when her employer, Corporate Press, a 40-year-old Raleigh printing company, went out of business. His construction company, which mainly builds fences, was too small to afford health insurance.

Bad luck sometimes comes in bunches. Hicks, who had not been hospitalized in 12 years, got an infected elbow in March, and the infection spread to his bloodstream. It put him the hospital for a week — a $12,000 out-of-pocket expense.

After a taste of being uninsured, Hicks went shopping for a health insurance policy. But because he is a severe diabetic, and therefore viewed as a high risk, the cost was prohibitive. Hicks said the state’s biggest insurer, Blue Cross and Blue Shield of North Carolina, which has 86 percent of individual health insurance policies in the state, offered a policy with a $1,648 monthly premium. Hicks said that was unaffordable at a time when his household had gone from two incomes to one.

“We’ve got to eat, and we’ve got a house payment,” Hicks said. “It was just too much to handle.”

He saw a brief item in The News & Observer about the start of a new state health insurance program. Within a month, he had enrolled in Inclusive Health. His premium is $550 per month, and it covers his three daily shots of insulin, his blood pressure medicine and other medical costs.

North Carolina became the 35th state to create a high-risk health insurance plan in 2007, after a decade of debate in the legislature. It began offering insurance policies in January.

The measure had the backing of health groups, physicians, hospitals and insurance agents.

Adam Searing, a health-care consumer expert, said North Carolina’s high-risk pool is relatively industry friendly compared with those in other states. It includes a restriction that the risk pool charge premiums 175 percent of what private insurers charge, so as not to compete with private markets. And it provides no subsidies for the poor.

While it helps middle-class people without insurance, it is of little use