Slabbed is passing out a big attaboy to the editorial board at the Clarion Ledger today for helping spread the good word about Gene Taylor’s multi peril insurance bill HR 3121. I give Sid Salter grief from time to time but overall I find their opinions well reasoned as a general rule. As always we appreciate the continued support of the Clarion Ledger for their reporting on insurance and affordable housing. Here is today’s editorial:
When the U.S. Senate rejected the bill produced by the House that would add wind insurance to the National Flood Insurance e Program, senators said it wasn’t needed.
President Bush, who had threatened to veto the bill originating with Mississippi’s 4th District U.S. Rep. Gene Taylor, and backed by House Speaker Nancy Pelosi, said: “Government insurance would displace insurance that is already provided by the private market.”
He further said in a statement: “Expansion of the NFIP would also undermine economic incentives to mitigate risks because the program would likely distort rates from their market-determined values.”
In other words, the laws of supply and demand should determine insurance coverage, there’s plenty of insurance available – for those who can afford it – and government intrusion would alter the rates.
While that’s a fine argument in theory, this week, State Farm Insurance Cos. showed how that works in reality.
It says it won’t offer homeowner policies within 1,000 feet of the beach in Mississippi and about 4,000 more customers living up to 2,500 feet of the water won’t have their wind coverage renewed.
Taylor’s home was completely blown away with nothing left but a slab by Katrina. His insurance company, State Farm, refused to settle the claim. Thousands who had bought “hurricane” insurance found that the private companies refused to pay for wind-driven water, Katrina’s storm surge, calling it “flooding.” Lawsuits are still pending to force them to honor their policies, and the absence of available, affordable insurance offered by the private sector is stalemating the Coast’s rebuilding efforts.
The private insurance industry itself is proving Bush and the Senate’s “reasoning’ wrong. Taylor’s bill should be resurrected when a new president is installed in January.