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Sen. Trent Lott, R- Miss., appears to have quieted down since his Hurricane Katrina claim has been settled, but other senators in Washington are making noise concerning property insurance and natural disaster legislation.
Sen. Chris Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee and presidential candidate, is one of them. Dodd has introduced two bills to help homeowners and businesses lessen the financial strain experienced as a result of natural disasters.
Dodd says he believes that immediate assistance is needed for those on the coasts where property insurance premiums are rising and it’s equally important to look longer term to encourage these property owners to take steps to mitigate the effects of future natural disasters.
His first measure, the Homeowners Insurance Assistance Act of 2007, would provide a tax credit to help homeowners who are struggling to pay insurance bills that have skyrocketed as a result of Hurricanes Katrina, Rita and Wilma, as well as the 2004 hurricanes. The tax credits would be used to offset the costs of homeowners’ insurance premiums and targeted to those most in need. The tax credits would be available for one year to provide temporary assistance to affected homeowners in their primary residence.
Dodd’s second piece of legislation, the Property Mitigation Assistance Act of 2007, would establish a property mitigation loan program at FEMA, funded at $200 million annually, to assist homeowners and business owners in mitigating their risks of loss from natural disasters such as flooding, hurricanes, tornadoes and earthquakes. The federal funds would be used by states to help property owners elevate endangered portions of homes, build safe rooms and install other devices, such as storm shutters to protect vulnerable properties.
“Each year hurricanes and other natural disasters devastate and destroy homes, communities and lives. We shouldn’t worsen the problem by allowing the costs of escalating insurance expenses to ruin homeowners and business owners financially,” Dodd said. “We need to explore any and all long-term solutions to helping homeowners and business owners. But these families need immediate assistance to help reduce their costs. These two bills can help keep homeowners in their homes, before and after, a storm hits.”
Dodd is from an insurance state and as chair of the Senate Banking Committee, he holds a powerful position overseeing insurance legislation. Dodd has taken the lead on a number of insurance issues including terrorism reinsurance and federal flood. More often than not, his proposals are well developed and achievable as opposed to being grandstanding gestures merely designed to score political points at the expense of the industry.
Dodd’s approach won applause from Franklin W. Nutter, president of the Reinsurance Association of America. “Senator Dodd’s legislation is the right solution to affordability and availability of insurance in disaster-prone areas,” Nutter said. “Federal assistance should be focused on people, not insurance companies.”
Perhaps others in the industry will start listening to Dodd, as well.