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National Insurance Fund Could
Lower Premiums Here

By Carl Orth of The Suncoast News

Published: November 24, 2007

NEW PORT RICHEY, Fla. - The worst catastrophe since a series of hurricanes hit Florida in 2004 is sharply higher homeowner insurance rates, some county, state and federal leaders argue.

Backers of a National Catastrophic Insurance Fund believe the time has come for the self-insurance concept for states to supplement the private market.

"It is still the most important issue" in Florida, Pasco Commissioner Jack Mariano insisted recently.

Many residents have been hard pressed to pay the extra $200 to $300 a month for insurance escrow payments rolled into monthly mortgage payments, Mariano emphasizes.

"When private business is starting to take advantage of our residents, the government has to step in" and provide affordable coverage, Mariano thinks.

"I would very much like to see that happen," said state Sen. Mike Fasano, R-New Port Richey.

The federal government runs a national flood insurance program, so it makes perfect sense to have a fund for wind damage and other disasters, Fasano believes.

"I would have to respectively disagree with the president on that one," Fasano said about reports President Bush might veto catastrophe fund legislation. Foes favor private insurance market solutions.

"This is what happens when you live within the beltway" of Washington, D.C., Fasano commented, or even in the state capital in Tallahassee. "You lose touch."

U.S. Rep. Ginny Brown-Waite recently praised passage of the Homeowner's Defense Act, legislation that included a federal national disaster catastrophic insurance fund, or cat fund.

For the past three years, Brown-Waite has led efforts to create such a fund.

Many U.S. House leaders, Democrat and Republican, apparently agree. The legislation passed easily by a vote of 258-155.

"For the past three years, I have worked ... to get members to rethink the way we view natural disasters in this nation," Brown-Waite said in a press release.

A Senate companion bill, sponsored by Florida Sen. Bill Nelson, recently got a big boost when Sen. Hillary Clinton, D-New York, came out in support of the measure.

Detractors argue a national catastrophic fund could expose all U.S. taxpayers to a huge financial liability while only benefiting the owners of property in areas vulnerable to hurricanes or other natural disasters.

The Brown-Waite amendment requires the Secretary of the Treasury to provide reinsurance contracts to states, like Florida, that have established state cat funds.

The federal catastrophe fund would provide lower-cost reinsurance to state cat funds, thus reducing the costs of homeowners' insurance to those around the country.

The legislation also includes a mandate that any savings from purchasing the cheaper federal reinsurance must be passed along to the individual homeowner.

"Taxpayers are sick and tired of seeing their homeowner insurance rates go up year after year," Brown-Waite said.