Two Mississippi lawmakers are proposing a stream of money, generated by taking a portion of the growth in the state’s gambling revenue, to hold down homeowner insurance rates on the hurricane-ravaged Gulf Coast.
Earlier this year, the Mississippi Windstorm Underwriting Association, commonly known as the wind pool, requested a rate increase of 400 percent as a result of the devastation caused in August by Hurricane Katrina.
In an effort to reduce the amount of the increase needed by the wind pool, Gov. Haley Barbour set aside $50 million of the federal Community Development Block Grants funds awarded to the state for hurricane recovery.
While the block grant funds will hold down the size of the needed increase for the wind pool, it is not clear by what amount. Insurance Commissioner George Dale has not yet acted on the rate increase request.
Reps. Diane Peranich, D-Pass Christian, and Jamie Franks, D-Mooreville, said the block grant is only a short-term solution for the surging homeowner rates.
Franks said a steady stream of revenue will ensure that rates are not increased in other parts of the state in an effort to hold rates down on the coast.
Peranich said, “It is imperative that we have some long-term relief because our mortgages are going to be for 30 years, and dedicating a revenue stream from the gaming proceeds that are generated in south Mississippi is totally appropriate.”
The Mississippi Windstorm Underwriting Association was created by the state Legislature to provide wind and hail insurance for coast property owners who could not obtain private insurance. The wind pool is funded by assessing all insurance companies that provide property coverage in the state.
About 16,000 homeowners, primarily in the three coastal counties, are covered by the wind pool. Greg Copeland, attorney for the wind pool, said the number insured by the state-created entity is expected to increase dramatically as fewer private insurance companies return to the Gulf Coast.
The lack of affordable homeowner insurance “will completely stifle the recovery,” said attorney Ron Peresich, who is a member of the Gulf Coast Business Council.
A failure of that recovery, Peresich said, would be devastating not only to the region but to all of Mississippi because of the coast’s statewide economic impact.
“Failure is not an option,” Peresich said. “We have to get 100,000 people back in their homes.”
Gambling revenue is expected to grow dramatically in upcoming years as more casinos are rebuilt on the coast.
Franks and Peranich said that not all of the growth in gambling revenue would be needed for the wind pool.
They said the portion of gambling revenue going to help fund other programs, such as education and health care, would continue to grow.
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