Clinton Support for Multi Peril Insurance Makes Front Page of the Sun Herald

Again our congratulations to Steve for helping to force this issue with our Democratic Presidential candidates. Steve tells me he is still waiting to hear back from the Obama camp. As reported here first and without further analysis here is Anita Lee’s story:

As Mississippi’s Democratic presidential primary approaches, Sen. Hillary Clinton has thrown her support to multiple-peril insurance coverage for coastal communities.

Clinton sent a letter Friday to Senate Banking Committee Chairman Chris Dodd, D-Conn., urging him to consider adding wind coverage to federal flood insurance, a proposal from U.S. Rep. Gene Taylor, D-Miss. A flood-insurance bill left Dodd’s committee without wind coverage.

Clinton noted two major insurance companies have withdrawn coverage from her constituents in coastal New York, a situation that is not isolated.

“Homeowners throughout the country are increasingly facing the Catch-22 of either losing access to catastrophic and homeowners insurance because the private insurers are pulling up stakes and leaving markets altogether or facing skyrocketing premiums that are prohibitive to many working families,” Clinton’s letter said. She also said she will continue to work on a separate insurance proposal to bring long-term stability to the insurance market.

At a campaign event in Hattiesburg on Friday, Clinton addressed another recent Coast Katrina-recovery issue, the debate over Gov. Haley Barbour’s plans to spend $600 million in federal Katrina-relief money to rebuild the Port of Gulfport. Advocates of low-income housing have criticized this, saying the state should spend that money on more housing.

At her rally, Clinton wondered aloud that with the nation’s might and wealth, “Why can’t we do both, rebuild the port, and get these people out of… FEMA trailers?”

7 thoughts on “Clinton Support for Multi Peril Insurance Makes Front Page of the Sun Herald”

  1. That’s a start for Hillary but I wonder what she means by continuing “to work on a separate insurance proposal to bring long-term stability to the insurance market” means?

  2. Belle, there is another proposal called Klein-Maloney named for a Congressman from Florida that is a worthy alternative to Gene’s bill though it does not address the wind-water problem. The short explanation is that Klein would allow the state pools to band together and tap the reinsurance markets directly by allowing them to issue Catastrophe Bonds as well as provide a federal backstop should an event like Katrina happen that would threaten the solvency of the state pools. The backstop would operate exactly like the one created for private insurers for terrorism. Hillary Clinton is the Senate sponsor of this bill. President Bush has gone on record against Klein Maloney threating a veto should it pass.

  3. Belle, Sop knows the wind-water issue has been a source of much frustration for me – it just doesn’t make sense to call a hurricane a windstorm when scientifically thunderstorm is correct. Promise did a post on this early on. If you’re interested, check the Archives.

  4. Nowdy this is more than just a simple question of semantics. The anti concurrent clause in effect lets insurers off the hook for wind damage caused by Hurricanes unless the homeowner either stays behind with a video camera or the insured provides proof wind acted before the water came in effect adjusting their own claims.

    This post with an embedded youtube video explains the concept and why in reality it is a bait and switch on part of the industry. The event people buy wind insurance to cover on the coast is Hurricane hits. Part of the confusion is sown by the industry itself when they inserted “Hurricane deductibles” into their wind policies. To the average person here, a policy with a Hurricane deductible is a “Hurricane policy”. Anti Concurrent Causation guts Hurricane coverage for those at risk for storm surge flooding.

  5. Sop, I’m not talking semantics. I believe we’re both saying the wording of the policy means customers have lost before they even get started in terms of getting damage covered.I believe I’m saying the same thing.

    If you start with a policy that calls a hurricane a “windstorm” instead of a “thunderstorm”, you’ve lost half before you ever get to the issues you’ve identified – and then it’s all downhill from there.

  6. The part of the problem is the policy language no doubt but the larger problem derives from having two separate policies cover the risks from one event.

    Since the government is involved in one of the events (flood) while the claim is generally adjusted by the wind insurer not only is the door open to abuse via the inherent conflict of interest that exists in the system as it is currently set up.

    If the parties providing the event coverage were the same then the solution of a federal backstop is most reasonable and should work. The problem is wind and flood coverage isn’t under the same roof so it becomes reasonable for the Government to assume the risk private insurers want no part of; coastal wind coverage.

    Doing nothing only guarantees more wind-water litigation, which benefits a select few such as the Bar.

    sop

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