April 11, 2007

DODD: “ We must protect Americans from natural disasters, and assure them that when disaster strikes, they will be able to rebuild their homes, their businesses and their lives.”

In light of the hardships facing homeowners and businesses in coastal regions to insure themselves against hurricanes and other natural disasters, Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, today convened a hearing entitled “An Examination of the Availability and Affordability of Property and Casualty Insurance in the Gulf Coast and Other Coastal Regions.” At the hearing, Dodd proposed four actions to help Americans afford property insurance: • Premium Assistance for Working Families: Premiums have been skyrocketing for homeowners insurance in areas susceptible to natural disasters. Dodd proposes $100 million in tax deductions on these premiums – targeted to working and middle income families – to give homeowners some desperately assistance in paying those premiums. • Federal Safety Fund for Businesses and Homeowners: Dodd proposes a $100 million investment fund for businesses and homeowners to mitigate against the risk of damage caused by a national catastrophe. • Strengthen the National Flood Insurance Program: The National Flood Insurance Program, essentially the only insurer of flood risks in the country, is now over $20 billion in debt as a result of Hurricane Katrina. Clearly this program was not designed to handle a catastrophe of the magnitude of Katrina, and is not equipped to handle another disaster. In order to ensure the future availability of flood insurance, we must put this program on sound financial footing. • Develop Long-Term Solutions: A commission of insurance experts and other leaders should be established to make recommendations to Congress on what national action, if any, is appropriate in the long-term to help home owners and business owners contend with rising property and casualty premiums. Legislation to establish such a commission has been proposed by Sen. Bill Nelson (D-FL), Sen. Mel Martinez (R-FL), and others. Chairman Dodd heard from public officials in affected states including Governor Charlie Crist of Florida, consumers, and representatives from the insurance industry. “The lack of affordable insurance is a serious problem for millions of Americans across the country,” said Dodd. “Many states have attempted to address the lack of available and affordable insurance by taking measures such as setting up state insurance pools to cover wind and other damages. However, these states cannot be expected to shoulder the burden alone, given the magnitude of the losses that have occurred over the past few years, and that may occur in the years to come. “This is a national problem. As such, it deserves examination by us as national leaders.”