Congresswoman Ginny Brown-Waite

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Homeowner's Insurance

As Floridians know all too well, when natural disasters strike, it is your family and your home that is most often directly affected You may lose your car, your personal mementos, or even your house to the ravaging effects of Mother Nature. While it seems like Florida has borne the brunt of recent hurricanes, it is clear to Ginny that natural catastrophes are national problems that need national solutions.

Ginny also knows what these recent natural disasters have meant to you and your family when you receive your yearly rate increase in your homeowner's insurance bill. For families and seniors on limited incomes, an extra couple hundred dollars a year to insure your home from a hurricane might be too much for some people to bear.

That is why Ginny has introduced federal legislation, H.R. 4366, the Homeowner’s Insurance Protection Act of 2005. This bill represents a comprehensive piece of catastrophic insurance legislation designed to reduce homeowners insurance costs to American families and ensure liquidity in the insurance market. Ginny's bill will establish a federal reinsurance catastrophic fund (cat fund) as a federal backstop for future natural disasters.

Hurricanes Katrina and Wilma showed the nation what can happen when Mother Nature wreaks havoc on American homeowners. More than a thousand Gulf Coast residents lost their lives in the storm, and tens of thousands were left homeless. The cost of rebuilding is great. While Congress has met their immediate needs, it is clear that our national response to natural disasters is broken, and must be fixed.

Hurricanes, earthquakes, tornadoes and other natural disasters pose a threat to every corner of America. Today, all taxpayers are paying for the recovery efforts in the Gulf. Ginny's bill creates a federal catasrophic reinsurance fund, which state cat funds would contribute to, so that the federal taxpayers would no longer be forced to foot the bill for natural disasters.

H.R. 4366 encourages states to create catastrophic funds by providing a federal backstop for those who do so. The federal fund, to be named the Consumer Hurricane and Earthquake Protection Fund, or HELP Fund, will be housed in the Department of the Treasury and will provide lower-cost reinsurance to state cat funds, thus reducing the costs of homeowners' insurance to those around the country. Under Ginny's bill, should a 1:50 year natural disaster event strike a state, the federal catastrophe fund would provide coverage up to a 1:500 year event.

While all Americans have seen the devastation of the hurricanes that hit Florida, Mississippi, Alabama and Louisiana the last two years, the insurance market must be prepared for the possibility of even bigger disasters in the future. If the San Francisco earthquake of 1906 were to hit today, the estimated costs to insurance companies would run more than $400 billion. We need to have statewide cat funds, with a federal backstop, to help ensure the stability and viability of the insurance market for homeowners.

Ginny has also worked with a new organization working to ensure that American's are informed and educated about the need for disaster preparedness. ProtectingAmerica.org is chaired by former FEMA head James Lee Witt and the former head of the Coast Guard, Admiral James Loy. More information about their efforts can be found at http://www.protectingamerica.org/.

More information about hurricane and disaster preparedness can be found here or by visitng FEMA's website at www.fema.gov.