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Risks don't end at state line

By A TIMES EDITORIAL
Published April 16, 2007

Key members of the U.S. Senate listened to Gov. Charlie Crist's tale of woe about the rising cost of hurricane insurance ... and shrugged. It's going to be a hard sell to convince lawmakers from other states that Florida's plight is also theirs.

Sitting between Florida Sens. Bill Nelson and Mel Martinez, Crist made a case for national attention to Florida's insurance crisis. Eight named storms in 2004 and 2005 destroyed $33-billion worth of Florida property, Crist noted, yet that paled in comparison with the devastation Katrina wrought on other Gulf Coast states. In that case, it is taxpayers from every state providing the bailout.

"Consider the $110-billion allocated so far to facilitate recovery and rebuilding following Hurricane Katrina," Crist said. "As generous and compassionate as the American people are, this current system leaves much to be desired."

As long as Congress refuses to consider a national catastrophic fund, taxpayers will be left to pick up the tab for hurricanes, earthquakes, blizzards and droughts. For that reason, more states outside the hurricane zone are seeing the wisdom of a national catastrophic fund that would act as a backstop in the worst tragedies.

Arguing against a government response was the Bush administration, which inexplicably hasn't been paying much attention to Florida's travails. "National catastrophic risk insurance would displace private insurance and undermine the economic incentives to mitigate risk," said Edward Lazear, chairman of the president's Council of Economic Advisers.

Note to Mr. Lazear and his boss, President Bush: Floridians can rarely get private windstorm insurance, and when they can it is increasingly unaffordable. So the private insurance market has failed in Florida, even though, as Crist noted, it is pocketing record profits.

For now, the Senate will consider formation of a bipartisan commission to study the problem and recommend a solution to the outsized risk faced by property owners, states and taxpayers. It's a start, as long as the opponents of a national cat fund aren't using it as a stalling tactic. Unfortunately, the insurance industry has at least as much clout in Congress as it does - or did - in the Florida Legislature.

Florida politicians are presenting a united front and winning over support from other states that realize we are all in this same leaking boat together. But will it be enough? As another hurricane season approaches, Congress needs to act rather than just impotently study the problem.

[Last modified April 15, 2007, 21:16:52]