WASHINGTON, DC – Congressman Bill Delahunt today announced his co-sponsorship of the Homeowners Defense Act of 2007 which will help coastal states expand access to affordable homeowners insurance.

“Over the past year, I have heard from hundreds of constituents on Cape Cod, Martha’s Vineyard, Nantucket and on the South Shore who are impacted by the rising cost of homeowners insurance. This legislation will help states provide homeowners in coastal areas with access to a wider range of policies at more affordable rates,” Delahunt said.

The Homeowners Defense Act, HR 3355, was introduced by Congressman Ron Klein of Florida on August 3rd to address the growing crisis in the availability and affordability of homeowners insurance and to stabilize the catastrophic insurance market.  It provides an opportunity for states to responsibly plan for disasters ahead of time, while offering emergency relief for those states that may be in lower-risk regions.

This proposal will enable states to set up a consortium to voluntarily pool their disaster risk which is transferred to private markets through the use of catastrophe bonds and reinsurance contracts.  This takes away the burden for American taxpayers, who would otherwise be saddled with the cost of a bail-out in the event of a natural disaster.

It would also create a National Homeowners Insurance Stabilization Program, which would provide low-interest federal loans to states impacted by severe natural disasters. By doing so, the federal government will be providing the capital needed to begin the rebuilding process.

Specifically, the Stabilization Program will make available two types of loans: liquidity loans and catastrophic loans.  Liquidity loans would allow a state’s catastrophe fund to cover its liability in the event that it is not fully funded. Catastrophic loans would allow these funds to cover damages that exceed its liability. 

To view a copy of the bill, H.R. 3355, please click here.

 

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