Anticipated hurricanes fuel stormy insurance debate
It’s almost hurricane season, and a storm is brewing over the federal government’s role in protecting states during climate catastrophes.
One side wants Washington to dive into the insurance market to stabilize rising prices of homeowner policies as the number of catastrophes worldwide is growing. The other says that will encourage more coastal development, and is pressing for tougher building standards that can harden existing homes during heavy-hitting storms.
U.S. Rep. Ron Klein (D-Fla.) reintroduced the Homeowners Defense Act, which would make the Treasury Department a reinsurer during massive events that have a half a percent chance of occurring in any given year.
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The Competitive Enterprise Institute believes the bill would undermine the private insurance market and burden taxpayers with huge new costs. The Sierra Club, meanwhile, says the bill would subsidize insurance rates, thus encouraging coastal development while reducing natural defenses against rising seas and stronger storms.
“This is very bad idea that we can talk people out of,” said Eli Lehrer, a senior fellow at the Competitive Enterprise Institute, who said Obama offered “vague” support of the bill while campaigning for president.
Instead, the coalition is supporting a bill introduced by Rep. Bennie Thompson (D-Miss.) that would authorize the Federal Emergency Management Agency to issue $200 million annually for five years to strengthen vulnerable homes.
New York Times
5/28/9
Magnolia Tribune
