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USA TODAY Has it Right on Hurricane Recovery and Policy: 'Don't 'Fix' Insurance Program By Making It Bigger'

"The point of public policy shouldn't be to make it cheap to live in attractive but dangerous areas, but to promote development where it's safer. The federal flood insurance program has done just the opposite. Not only does it encourage building on the coasts and near rivers, it encourages rebuilding by paying homeowners whose homes have been repeatedly flooded. In an extreme case, oneHouston area homeowner received $807,000 from the federal program for 16 flooding events over about seven years to repair and rebuild, according to a report by the National Wildlife Federation. Such irresponsibility would be rewarded if the program were expanded." (USA TODAY, Editorial, September 17, 2008)

"Natural catastrophe policy requires a longer-term, more comprehensive approach than what is currently being proposed, particularly as we look for ways to protect the environment and keep people out of harm's way as we confront more intense storms and hurricanes, and as sea levels continue to rise," said David Conrad, Senior Water Resources Specialist at the National Wildlife Federation, a member organization of Americans for Smart Natural Catastrophe Policy.

"After Hurricane Katrina and Rita struck in 2005, the government program ran a nearly $20 billion shortfall that taxpayers everywhere were forced to pick up. That's because the program misses the point of insurance: collecting premiums based on risk from a large pool of policy-holders in order to pay for claims when disaster strikes some of them. Instead rates were based on politics, so premiums remained relatively low, even for those who built multi-million beach homes." (USA TODAY, Editorial, September 17, 2008)

Members of Americans for Smart Natural Catastrophe Policy, a national coalition of environmental, consumer, taxpayer, free market and insurance organizations, agree that the issue of natural catastrophe policy is too important and complex and deserves additional study before Congress takes further action. The Commission's bipartisan membership should include experts in areas such as risk mitigation and prevention, climate change science, public finance, flood mapping, building standards, emergency management, environmental issues, insurance and reinsurance.

A recent study by a Clinton Administration economist, Dr. Robert Shapiro, estimates that losses, which would be covered by the federal government under some of the proposals being considered, would reach up to $332 billion in 2017 if a hurricane season comparable to 2005 occurred again. Taxpayers in at least 20 states would face new, multi-billion dollar burdens, including at least $19 billion for Californians, $11 billion for New Yorkers, $7 billion for Illinoisans, $6 billion for taxpayers inPennsylvania andNew Jersey, and $5 billion for those inOhio.

"We shouldn't displace productive private insurance and reinsurance industries with expensive, unworkable government programs," said Eli Lehrer, Senior Fellow with the Competitive Enterprise Institute, another member organization of Americans for Smart Natural Catastrophe Policy. "The House and Senate conferees on the National Flood Insurance program should take a very careful look at this groundbreaking study. Above all else, we need to create an insurance environment that preserves the environment and encourages safe, effective building. A national catastrophe policy commission could play an important role pointing the way towards a better system for managing catastrophes."

"After Ike, Gulf Coast residents deserve the nation's sympathy and the help they need to restart their lives. Nevertheless, an expensive new program built around one that is deeply flawed does no one a favor, least of all people encouraged to build and rebuild in harm's way." (USA TODAY, Editorial, September 17, 2008)

Americans for Smart Natural Catastrophe Policy believes there is a better way and urges Congress to enact the Property Mitigation Assistance Act, which was recently introduced by the Chairman of U.S. House of Representatives Committee on Homeland Security, Rep. Bennie Thompson (D-MS). This environmentally-responsible, fiscally-sound approach is more effective than the so-called Homeowner's Defense Act, which seeks to needlessly expand taxpayer liability.

About Americans for Smart Natural Catastrophe Policy

American for Smart Natural Catastrophe Policy is a national coalition made up of a diverse set of voices united to support environmentally-responsible, fiscally-sound approaches that promote public safety. The Coalition strongly opposes legislative proposals that encourage people to build homes in hurricane-prone, environmentally-sensitive areas by creating new programs that directly or indirectly subsidize their homeowner's insurance.

To learn more about the Coalition and its members, or to access information and research studies about the legislation, visit www.smartnatcat.org.

SOURCE Americans for Smart Natural Catastrophe Policy