House Insurance Bill May Encourage Coastal Development

A new bill introduced in the U.S. House of Representatives would require that insurance coverage be available for properties in locations prone to natural disasters such as hurricanes. Introduced by Democrat Ron Klein of Florida, the bill would primarily benefit that state, which has a fund subsidizing insurance for certain high-risk areas along the coast.

The bill, H.R. 2555, would create a consortium that would allow states to pool their risk, provide federal reinsurance for states’ natural catastrophe funds, and guarantee state bonds with federal money. The bill has been derided as a “beach house bailout” by some groups, which point to a Congressional analysis showing it would cost federal taxpayers $1.7 billion over five years.

In addition, “H.R. 2555 encourages development in unsafe and environmentally fragile areas,” claims SmarterSafer.org, a group of environmental, taxpayer, and insurance organizations, in a letter to Congress. More information on the bill is available at www.govtrack.us.

– Allyson Wendt