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Creative Windstorm Coverage

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The Tampa Tribune

Published: May 31, 2008

Hurricane season is upon us, and we should all hope for a year like the last two.

No storm has touched the state since Wilma in 2005, but if Florida is hit by a catastrophic storm this year, we'll all be paying for it.

The largest insurance company in Florida is the state-run Citizens Property Insurance Corp. And if a massive storm hits any of the state's coastal population centers, we'll each be assessed extra money on our property and casualty lines of insurance for any deficit the company incurs.

And if - God forbid - we have another year like 2004 or 2005, when four hurricanes each hit, it's not clear how the state will pay for the damage.

That's why Florida's congressional lawmakers - along with those of other coastal states and regions prone to natural disasters - should continue working together to create a regional or national catastrophe fund and spread the risk of damage caused by wind, fire or shaking ground.

It's a hard sell, of course. Why would lawmakers from the Midwest and Plains' states agree to support the lifestyles of those who live along the coast? Because taxpayers across the country inevitably wind up paying for disasters like Hurricane Katrina.

The House understood that fact when representatives recently passed legislation adding, for the first time, wind coverage to the federal flood insurance program.

Both Florida senators, Democrat Bill Nelson and Republican Mel Martinez, supported a similar plan with largely symbolic votes in the Senate, which refused to go along. Their colleagues had reason. The flood program already is $28 billion in debt, and no one can say how much wind coverage would add to its deficit.

But the Senate legislation includes plans to appoint a commission to develop a program that covers the kind of damage wind can produce in a horrific storm.

It's true the formation of a committee guarantees nothing, but it could be the first step toward a national or, more likely, regional solution.

Nelson has backed a plan proposed by Reps. Ron Klein of Boca Raton and Tim Mahoney of Palm Beach Gardens that would have encouraged states with catastrophe funds like Florida's to form a consortium that together would sell bonds and buy reinsurance to cover the day the big one hits.

As Nelson points out, Florida has a catastrophe fund that spreads the risk over 18 million Floridians.

"Does it not make a lot more sense to spread that hurricane catastrophic risk over 50 million Americans, by getting all the Gulf states and the Atlantic coast states to combine in a regional catastrophic fund, since at the end of the day, it is going to be very hard to get a national catastrophic fund?" he asks.

It does make sense, senator, and with predictions of an active hurricane season starting tomorrow, you have plenty of reason to sell your colleagues on the idea.

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