Don't turn natural disasters into financial disasters
Congress should help people living in hurricane-prone coastal areas to take pro-active loss mitigation steps to protect their property, not encourage further development of these high-risk, environmentally-sensitive locales by creating a new, taxpayer-funded program to subsidize their homeowners' insurance. The National Flood Insurance Program is already $18 billion in debt, but some in Congress want to make matters worse by adding wind coverage to the program. Adding wind to the NFIP would unnecessarily burden all taxpayers by using their tax dollars to subsidize homeowners in catastrophe-prone, environmentally-sensitive areas.
"Those living further inland would end up subsidizing the costs of residents living on the coast. And, in the end, all taxpayers would suffer." -- David Conrad, National Wildlife Federation (Victoria Advocate, October 30, 2007)
"Allowing the federal government to expand its involvement in a program already deep in debt would not only cost Americans tens of billions of dollars, but would do little to protect their safety or that of our precious environment." -- Eli Lehrer, Senior Fellow, Competitive Enterprise Institute
Solution: Risk Mitigation Policies Work
Encouraging coastal residents to take steps to protect and strengthen their homes and businesses is the right way to go when it comes to natural catastrophe insurance legislation.
“It’s encouraging to see a more responsible approach to natural catastrophe legislation that encourages coastal residents to strengthen their homes, rather than expand already insolvent government programs that will ultimately victimize coastal residents and American taxpayers even further.” -- Thomas Schatz, President of the Council for Citizens Against Government Waste
Representative Bennie Thompson’s (D-MS) recently-introduced Property Mitigation Assistance Act—similar to Senator Chris Dodd’s (D-CT) risk mitigation proposals—is an environmentally-responsible and fiscally-sound alternative to the Flood Insurance Reform and Modernization Act. Sen. Dodd and Rep. Thompson’s bills serve to promote public safety without financially overwhelming the National Flood Insurance Program by providing tax credits and loans to homeowners and business owners who take efforts to reduce the risks and damage of severe storms, before disaster strikes.
Read a summary of H.R. 6424 - Representative Thompson’s Property Mitigation Assistance Act.
Read a summary of S. 2328 - Senator Dodd's risk mitigation tax credit and loan program proposals.
Subsidizing insurance for homeowners in
coastal areas undermines public safety and
puts Americans at risk
Americans for Smart Natural Catastrophe Policy is a diverse coalition of consumer advocacy, taxpayer, environmental and insurance industry groups that has joined together to raise concerns about natural catastrophe legislation being considered in Congress. The new group also advocates responsible legislation that gives homeowners incentives for, and assistance in, protecting their homes.
Fortunately, the United States Senate voted 74-19 on May 7, 2008, to reject an amendment, sponsored by Senator Roger Wicker (R-MS), which would have added wind coverage to the NFIP. The threat remains, however, because the House of Representatives voted last year to add wind coverage to the NFIP. A conference committee of the Senate and House will convene soon to make a final decision.
In the face of the overwhelming negative vote on the Wicker Amendment, Senator Bill Nelson (D-FL) also withdrew an amendment that he had offered to establish a federal backstop natural catastrophe insurance program, which would have unnecessarily subsidized state catastrophe insurance or reinsurance programs, such as those in Florida. Senator Nelson's proposal, like that of Senator Wicker, has been criticized for exposing Americans nationwide to the risks of a taxpayer bailout and providing an incentive to build homes in hurricane-prone, environmentally sensitive areas.
"Defeat of this amendment will help protect the environment by and help keep people out of harm's way as we confront more intense hurricanes, sea level rise and flooding." -- David Conrad, Senior Water Resources Specialist, National Wildlife Federation
Read our Letter to the United States Senate.
Read our statement of principles.
