Ginny and Admiral Loy

Washington, D.C., Jun 28 -

U.S. Representative Ginny Brown-Waite (FL-05) today took part in a hearing in the House Financial Services Subcommittee on Housing and Community Opportunity entitled, “Natural Disasters and Homeowners Insurance.”  A member of the Subcommittee, Rep. Brown-Waite took a leading role in discussing the need for a federal plan to prepare for the effects of natural disasters on America’s homeowners.

“Earlier this week I spoke to several of my constituents on the Gulf Coast of Florida, and their number one concern was what to do about the high cost of homeowner’s insurance,” said Rep. Brown-Waite.  “One gentleman told me that his annual premium was going to rise from $1,000 per year to nearly $5,000.  Given the extraordinary number of powerful hurricanes that have hit Florida in recent years, I can relate to their stories of rising rates.

“When looking at the bigger picture, however, it is important to look at the nation as whole and not just one state or the Gulf Coast region.  Every part of the United States is at risk from natural disasters, whether it be a hurricane, an earthquake or a tornado.  That is why we need a national response when we see that insurance companies have stopped issuing new homeowner’s policies in high-risk states like Florida or New York.

“Establishing a federal catastrophic insurance fund will provide a backstop in case the ‘big one’ hits.  2006 is the 100th anniversary of the San Francisco earthquake.  Should a similar earthquake strike San Francisco today, it would have a devastating impact on the insurance industry, drive up the cost of individual homeowner’s policies and keep insurance companies from operating in high-risk regions.

“I must thank Chairman Ney and Chairman Oxley for the opportunity to hold this hearing today.  It was the first chance for many Committee members to hear firsthand from experts like Florida Commissioner Kevin McCarty about how best to meet the challenge of rising homeowner’s insurance costs.  It was also refreshing to hear from some of the so-called consumer interest groups that stand opposed to creating a federal cat fund.  I asked pointed questions about their opposition, and am still waiting for an informed response that presents a thought out answer or counter-proposal.  I hope that we will have a better dialogue in the future.

“I also find it interesting that when I pressed representatives from the reinsurance industry on whether or not homeowners are covered in case the ‘big one’ hits, their answer was no, they would not be covered.  And yet, for their own selfish reasons they still refuse to support legislative reforms like H.R. 4366.  I found their answers unbelievable, yet not altogether surprising.

“America’s homeowners are an important cog in our nation’s economy, and leaving their insurance policies up to the whims of Mother Nature is irresponsible.  If we do nothing, we cede our responsibilities as a legislative body and put the rate increases on the backs of our constituents.  With the first tropical storm of 2006, Alberto, behind us, and many months of storms ahead, we must take proactive measures to guard against future natural disasters.  H.R. 4366 and H.R. 846 are a good first step toward meeting that goal.”