Did you ever get the feeling that some Floridians would like folks in the other 49 states to subsidize the risk of living in a hurricane prone state?
Seen in the Sun-Sentinel:
“Some disasters are just too large or unpredictable for the private market to manage alone,” said Charles Bonfiglio, president of the 150,000-member Florida Association of Realtors.
That’s why Florida congressmen Ron Klein and Tim Mahoney pitched the Homeowners Defense Act last year that was passed by the House of Representatives but stalled in the Senate. The hearing Monday — held by a subcommittee of the House Financial Services Committee — was intended to start building support for what’s expected to be an uphill battle to rally support for the Senate’s version of the bill.[...]
Florida leaders say they can’t bear the risks alone and need help from the federal government. Insurance Commissioner Kevin McCarty told lawmakers that, “to some extent, Florida subsidizes” the federal flood insurance program because it pays about 41 percent of the premiums and has only received about 16 percent of the claims. Now, he said, other states need help and the best way to do it is to spread the risk across the country.
Of course, prior to Katrina, the total losses paid by the NFIP in the 36 years of its existence were $15 billion…and, if I’m not mistaken, difference between McCarty’s 41% and 16% would be, well, Katrina, which is a rather unique and unusual situation that shouldn’t be considered too heavily in any analysis (or at least that’s what the OIR tells me when I mention 2004 or 2005 in any Florida rate filing).
