Disaster insurance called a national problem

The high cost of homeowner insurance is not just a problem in storm-prone Florida. It’s a national problem that potentially affects every state, says the chairman of a congressional panel that met in West Palm Beach today. “Severe weather — such as hurricanes, earthquakes, wild-fires and ice storms — knows no geographic boundaries,’’ said Dennis Moore, a Democrat from Kansas and chairman of the House subcommittee on oversight and investigations. “How these devastating tragedies impact the affordability and availability of homeowners’ insurance is a national problem that demands a national examination and response.” Dennis Moore That’s what South Florida Congressman Ron Klein, a member of the panel, wanted to hear. It’s the reason he urged the panel to meet in South Florida, where residents are clamoring for relief from high insurance rates after a series of hurricanes bashed the state in 2004 and 2005. Klein has introduced a bill to create a national insurance pool. Critics contend that taxpayers nationwide should not have to subsidize coverage for residents who choose to live in vulnerable places. To rebut the

objection, Klein and other backers note that every state faces some kind of disaster. His bill would allow states the option of pooling resources to spread the risk and limit the liability of private insurance companies so they can keep rates affordable. The fund would be partially financed by issuing bonds backed by the federal government. In Klein’s vision, premiums paid by consumers would still vary based on risk. That means South Floridians would pay more than a resident of an inland state like Kansas. The idea is to have a funding source in place in cases of widespread catastrophe. Backers say such a fund would be more efficient and less costly to taxpayers than the current practice, in which the federal government rushes into disaster areas passing out millions of dollars. Today’s hearing was designed to gather testimony from local and state leaders to help make a case for passing Klein’s bill later this year. Click here for more info on the hearing.

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Disaster insurance called a national problem

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