Louisiana state senators say they will ask Congress to have the federal government insure homes against hurricane damage, as it does for floods.
“Y’all won’t sell it, so why not get the federal government to do it?” Sen. James David Cain, R-Dry Creek, told insurance industry executives Feb. 6.
Congress is beginning to debate the idea, but the Bush administration’s hurricane recovery leader opposes it.
Cain said Hurricanes Katrina and Rita did more than $40 billion in damage. “This is too big for us,” he said during an insurance official’s presentation of how the state could make it easier for more insurance companies to sell policies.
Few companies are selling wind and hail policies, which cover damage caused by hurricanes or tornadoes, in south Louisiana, and rates have risen dramatically since the 2005 hurricanes.
The federal government “already handles flood insurance; it’s in place. They should sell wind and hail along with that. It’s a simple solution,” Cain said.
“I couldn’t agree with you more,” answered state Sen. Julie Quinn, R-Metairie, who chairs the Property Insurance Task Force, which is developing legislation to change the way policies are bought and sold in this state.
“Our federal officials have not accepted this as a national crisis,” Quinn said.
Cain said he, Quinn and other state lawmakers plan to go to Washington to plead the case for federal assumption of hurricane insurance.
But Don Powell, President Bush’s advisor on hurricane recovery, said the federal government has no business insuring against hurricane damage like it does in the National Flood Insurance Program.
The federal flood insurance program had 5.3 million policies in force nationwide – 489,094 in Louisiana – as of November 2006.
“Hurricane insurance has always been a state issue,” said Powell in a phone interview from Washington after the state task force hearing.
“It’s a free-market issue,” he said. Interfering with private business and setting artificial limits does not in the long run help consumers, he said.
Powell said he is meeting with insurance industry officials in his Washington office. “I’m happy to sit down and talk to anyone about it. It is an issue,” Powell said.
The issue came up in the Congress Feb. 6.
U.S. Rep. Gene Taylor, D-Miss., said he will introduce legislation that would allow for hurricane coverage as part of the national flood insurance program.
He told the U.S. House Committee on Financial Services that private insurance companies are torturing homeowners over how much damage was caused by high winds and how much was caused by high water. His staff provided the text of the speech.
“If this bill is enacted, property owners will be able to buy insurance and know that their damage will be covered,” Taylor said.
“They would not have to hire lawyers, engineers and adjusters to try to prove what damage was caused by wind and what was caused by water,” he said.
U.S. Rep. Richard Baker, R-Baton Rouge, also favors the federal government handling a national disaster insurance, which covers hurricanes, earthquakes, tornadoes and other major catastrophes, said his spokesman Michael DiResto.
“How that gets accomplished those discussions are happening right now,” he said.
Jeff Albright, chief executive officer for Independent Insurance Agents & Brokers of Louisiana, said his trade association generally supports the idea provided it is structured properly as a backstop to private insurance offerings.
Albright said 70 percent of the U.S. population lives within 100 miles of the coast.
Information from: The Advocate, www.theadvocate.com.
Was this article valuable?
Here are more articles you may enjoy.