Miss. Coast Business Leaders Say Affordable Insurance Crucial

A member of a Jackson, Miss. Gulf Coast organization created to support the region’s recovery efforts told lawmakers Tuesday that Mississippi’s insurance crisis could prevent thousands of people from rebuilding their homes.

Ron Peresich of the Gulf Coast Business Council said if people cannot get affordable insurance, they cannot get bank loans to rebuild their houses. He said that means the state will lose tens of millions of dollars in taxes.

“I wish we could wait three to five years for the market to correct itself, but we can’t do it. The human cost is too great,” Peresich told a panel of senators who held a two-day hearing on the state’s insurance situation.

Lawmakers are studying various ways to address the insurance program, including making changes to the Mississippi Windstorm Underwriting Association, or wind pool, which writes policies for coastal residents who cannot get insurance from private companies.

The wind pool is funded by assessing all insurance companies that provide property coverage in the state. Recently, Mississippi Insurance Commissioner George Dale approved a 90 percent rate increase for the wind pool in the aftermath of Hurricane Katrina.

Deputy Insurance Commissioner Lee Harrell said some private insurance companies are considering whether they’ll continue to write policies across the state.

“In some of the situations, it’s solely based on future wind pool assessments,” Harrell said. “We had companies that didn’t even write policies on the coast, but they’re paying millions of dollars due to the wind pool assessment.”

The higher assessment on companies due to the 90 percent increase will be passed along to the policyholders, Harrell said.

Sen. Tommy Gollott, D-Biloxi, said the state may have to “get into some type of self-insurance.”

Peresich said affordable insurance also is critical to the Gulf Coast’s recovery because businesses need coverage to rebuild and create jobs. He said while the gaming industry appears to be on the rebound, it is possible that could stall if coast residents don’t return.

Sen. Billy Hewes III, R-Gulfport, asked Peresich how much money would the state have to invest to help lower the costs of the wind pool.

Peresich couldn’t give an exact figure on a state allocation, but he said the $50 million in federal funds Gov. Haley Barbour set aside for the wind pool helped reduce the rate increase.
“Whatever it costs us, if we do it, we’re going to get it back tenfold,” Peresich said.