My legislation does not ask for taxpayers to subsidize coastal insurance. It simply would allow coastal property owners who already have a flood insurance policy to have the option to buy their wind insurance from the National Flood Insurance Program. The premiums would be based on their risk and the wind insurance program would be required to pay for itself. The premiums would be less expensive than current rates, because the current premiums are much higher than what is needed to pay claims.
There is no functioning, competitive market for property insurance in coastal areas. Millions of homeowners and business owners are required by their mortgages or lenders to buy windstorm coverage, but private insurance companies are not required to sell it to them. Since Hurricane Katrina, insurance companies have abandoned coastal communities, creating an urgent insurance crisis along the Gulf Coast and the Atlantic Coast.
The Mississippi wind pool has increased from 16,000 policies to 45,000 policies and from $1.6 billion in liability to more than $6 billion. Every state from Texas to North Carolina has at least doubled the amount of insurance exposure in the state insurance pool in the past five years. State-sponsored high-risk pools have been forced to absorb more than $345 billion dollars of new hurricane exposure since 2005. That is not a functioning private insurance market.
Read more: http://www.sunherald.com/2010/08/14/2404332/rep-gene-taylors-response-to-the.html#ixzz0wgQhuV6D
Rep. Gene Taylor
Sun Herald LTE