A key senator has added his support to a House effort to bail out uninsured homeowners in New Orleans and elsewhere in the Gulf States where hurricanes Katrina and Rita destroyed hundreds of thousands of uninsured properties. Mississippi Sen. Trent Lott introduced a bill similar to the one championed by Mississippi Rep. Gene Taylor and three-dozen other House members that would allow uninsured-property owners in the storm-wrecked areas to retroactively buy flood insurance through the Federal Emergency Management Agency's National Flood Insurance Program.
Under the proposal, uninsured homeowners would be covered for flood damages caused by the two massive hurricanes in exchange of 10 years of premiums and a 5% payment. The payments would come out of the insurance payouts. Meantime, Mississippi Gov. Haley Barbour visited Capitol Hill last week to press his own plan to have the federal government allocate billions of dollars of unspent relief funds for Katrina and Rita to cover uninsured property owners. A failure to cover flood losses for the damaged properties would leave lenders holding the bag for billions of dollars of worthless mortgages.
