Print

Email story

Comment

Email editor

Other views

U.S. needs disaster fund

By JAMES M. LOY Special to the Times
Published February 10, 2007

Gov. Charlie Crist and legislative leaders from Florida are right to call for the establishment of a national catastrophe fund. The time is now, the stars are aligned and the need is urgent.

A national catastrophe fund would serve as a financial backstop for the private insurance market in those states, like Florida and California, where governors and legislators have had the foresight and good sense to set up state catastrophe funds.

Several states are actively pursuing the creation of their own catastrophe funds. Policymakers in New Jersey and New York have been actively debating the issue, and New Jersey's Legislature is expected to finalize action on a privately funded "cat" fund in the coming months. Massachusetts legislators recently held hearings on a Bay State version of a cat fund. Florida's neighbors along the gulf are all discussing, drafting or debating the merits of state cat funds as well.

Clearly, states from Texas to New England are concerned about the potential devastation that would follow the onslaught of a major hurricane.

But a national cat fund would not only address damages associated with hurricanes. Earthquakes are every bit as potentially disastrous, not only for the Western states but also for America's heartland as well.

In fact, the most massive earthquakes to ever hit the Lower 48 states didn't occur along the notorious fault lines of California in the 20th century. They occurred nearly 200 years ago, with an epicenter in New Madrid, Ark., and shook the ground from Mississippi to Michigan, from Pennsylvania to Nebraska. Because those earthquakes, which struck over the winter of 1811 and 1812, occurred long before cities had sprung up throughout mid America, loss of life and property were minimal and the quakes are not nearly as famous as the San Francisco earthquake of 1906.

But they were so powerful that they changed the course of the Mississippi River, destroyed buildings in St. Louis, Little Rock and into the Ohio Valley and, legend has it, rang church bells as far away as Boston.

The heightened hurricane awareness throughout the country, coupled with the growing awareness of America's vast vulnerability to earthquakes, could play a key role in determining how quickly federal policymakers hear Crist's plea for a national cat fund.

Of the 70 members of the House Financial Services Committee, which has jurisdiction over the creation of a national cat fund, all but five members are from states that have experienced earthquakes or hurricanes. Every member of the committee recognizes that a multistate catastrophe threatens the economy of the entire nation.

In addition to all these members being aware of America's vulnerability to natural catastrophe, there is a growing public awareness of the consequences of catastrophe.

In the post-Katrina world, all Americans have become aware of the enormous financial and human impacts of catastrophes. Hurricane modelers have done detailed analyses of what would happen if a serious storm were to make landfall near various American cities.

If a Category 3 hurricane were to make landfall, for example, midway along the New Jersey coast, damages to the Garden State are projected to exceed $100-billion. Equally frightening estimates have been made for other cites like New York, Miami and Galveston, Texas.

The likelihood of such devastation has become ever more apparent with recent projections by leading meteorologists. The verdict is nearly unanimous: Rising ocean temperatures and atmospheric conditions point to at least a decade of ever more frequent and furious hurricane activity.

Hopefully, our elected leaders in Washington will learn from history, listen to the experts and heed Gov. Crist's call for a national catastrophe fund.

Adm. James M. Loy (Coast Guard, retired) is co-chairman of ProtectingAmerica.org. He is senior counselor at the Cohen Group, a global strategic consulting firm, and is the former commandant of the U.S. Coast Guard and former deputy secretary of the Department of Homeland Security.

[Last modified February 10, 2007, 01:41:02]