News :: Opinion
McCain's Opposition To CAT Fund Could Cost Him Votes In Florida
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Published: July 29, 2008
Florida has voted Republican six out of the past seven presidential elections, but unless John McCain begins paying more attention to the state's most important issues, he can't assume it will turn red for him in November.
The Republican presidential candidate has downplayed environmental concerns about coastal drilling, voted against Everglades restoration and most important, blown off Florida's insurance crisis as no big deal.
The Republican senator from Arizona seems to be following national polls when he says it's smart to drill off the coast of Florida. The promise of immediately lower fuel prices is appealing if specious, but the threat that Clearwater's beaches would soon look like Galveston's is crystal clear to Florida's tourism industry.
A bigger issue in Florida could well be insurance. The Arizona senator has long opposed the creation of a national fund to help insurers cover catastrophic damage from natural disasters.
"If people are going to build homes where hurricanes hit, they have to assume a great part of that liability," he once explained. "We don't have that many hurricanes that hit Arizona."
McCain needs to understand that the politically important I-4 corridor from Tampa to Orlando wasn't considered a high-risk area until a few years ago. Because so many insurers dropped coverage or left the state, Florida built up its own CAT fund, which remains woefully inadequate to cover heavy damage. Insurance rates statewide have soared and will go higher if this hurricane season is a bad one.
As in the drilling issue, McCain is looking at national polls rather than trying to enhance his reputation as a clear, independent thinker. On drilling, he wants to do what most people think will help, even though it won't, given the growing worldwide demand for oil and the relatively small amount of U.S. reserves. On the CAT fund, he fears doing what would work because he knows uninformed people think it won't.
States that consider themselves low-risk have resisted proposals to create a nationwide risk pool, assuming their taxpayers would have to subsidize risks in Florida and other hurricane zones. It's the job of an effective national leader to help them see the big picture. Huge disasters can and do strike anywhere.
Floods, wildfires, tornadoes and earthquakes are capable of destroying entire towns. The San Francisco earthquake of 1906 is remembered because of the damage it did to buildings, but the much larger earthquake that hit along the Mississippi River in 1811 would have been a bigger disaster had it hit after the region was heavily populated.
It's hard to say one region is more disaster-prone than another because no one knows where the next disaster will strike. The largest insured losses in the second quarter happened in Texas, Minnesota, Kansas, Arkansas and Oklahoma. Two floods rated once-in-a-lifetime events have hit the Midwest since 1993. Recent flooding in Iowa has created $1.2 billion in unmet disaster needs.
It's the nature of insurance that most people could get along fine without it. The trouble is, no one knows beforehand who those people are. The broader the pool, the smaller the impact of costly, rare events.
Instead of playing on fears that one region is trying to get subsidies from everyone else, McCain should use his influence to help everyone understand the need to look ahead and share risks.
McCain's campaign is selling the message that he is the more practical candidate. If another major hurricane hits anywhere on the U.S. coast this season, McCain will find that the more practical flip-flop would have been on insurance, not oil.
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