As seen in the Memphis Commercial Appeal:
A $30 million government subsidy would slash prohibitive insurance rates that are stifling redevelopment on the Mississippi coast and could help curb rising prices statewide, Insurance Commissioner George Dale said Thursday.[...]
The Mississippi Windstorm Underwriting Association — the insurer of last resort, often called the wind pool — assesses companies throughout the state to provide coverage in areas most insurers deem too risky.
Dale used Shelter Insurance Company as an example. The company had no policies on the coast but was forced to ask for a 27 percent rate increase for policyholders as far north as Tupelo to cover its assessment for the wind pool, he said.
“So the guy in Tupelo with Shelter is looking at a 27 percent rate increase when really they had a good year,” Dale said.
I suppose that suggesting that adequate prices be charged and adequate surplus be maintained for coastal business is a politically incorrect thing to ask for.
Of course, if the people of the state deem it in their best interest to subsidize insurance coverage in catastrophe-prone areas, that’s fine…but perhaps a more efficient mechanism could be found to provide those subsidies, rather than going through the bureaucracy of assessing insurers, who pass along the costs to other in-state insureds.