A National Catastrophic Fund Will Lower Insurance Rates

There is a national problem taking place that requires a national solution. Hundreds of thousands of homeowners across the country are facing the very real prospect of being dropped by their insurance companies.  Homeowners can no longer afford property insurance, and many citizens are finding themselves in the position of having to choose between keeping their homes insured and paying the bills.

In Florida and across the country, homeowner’s insurance rates have skyrocketed, largely due to natural, catastrophic disasters like hurricanes, floods, and tornadoes. When the cost of one’s monthly premium is as much if not more as their monthly mortgage payment, and when many homeowners can’t even get coverage,  something must be done.

That is why I am proud to work together in a bipartisan manner with Rep. Tim Mahoney, along with Financial Services Chairman Barney Frank, Carolyn Maloney of New York, Ginny Brown-Waite of Florida, Charlie Melancon and Bobby Jindal of Louisiana, Dennis Moore of Kansas, and a host of other Members of Congress to develop legislation that would create a national catastrophic fund. The ultimate result of this legislation would be to lower homeowner’s insurance rates. We will begin holding hearings on this legislation in the very near future.

Consumer protection will be a major component of our national catastrophe program legislation.  The increased security and predictability of a national backstop will help to stabilize markets following a catastrophe, prevent insurance availability problems, and reduce insurance costs for consumers. Cost savings realized under the national catastrophe program will not be retained by insurers and state programs, but rather will be passed on to consumers.  The ability for these savings to be achieved at the retail level is at the core of this effort.