U.S. Rep. Dennis Ross (FL-15) will introduce the Homeowners' Insurance Protection Act next week. This bill will create a federal catastrophe reinsurance program to back up federal reinsurance programs like that of the state of Florida.
"When a once-in-a-lifetime disaster strikes, whole communities are lost, and people want to begin to rebuild -- and they want to rebuild quickly," said Ross. "Unfortunately, rebuilding is further hampered when insurance costs skyrocket after these tragedies. This is what we saw in Florida after Hurricane Andrew hit in 1992, what the Midwest saw in Joplin after the tornadoes ripped up the land, and what we're seeing in New York and New Jersey in the aftermath of Hurricane Sandy. The Homeowners' Insurance Protection Act will provide a safety net to insurers and markets, allowing them to provide affordable insurance to homeowners, and allow Americans to rebuild."
- The Homeowners' Insurance Protection Act establishes a federal fund to provide relief for catastrophic (once-in-200-year-storms or higher) losses caused by natural disasters.
- States that have established funds to cover catastrophic natural disasters on a smaller scale would have the option of buying reinsurance from the federal catastrophe fund. The provisions in the bill are not mandatory.
- Money in these funds would cover insured losses only. This is not a bailout, slush fund, or other funds set aside for future expenses.
- To participate, states are required to establish state reinsurance catastrophe funds, and payments from the federal catastrophe fund would be made directly to qualifying state funds, not insurers.
- Ross's bill contains many provisions that passed the House of Representatives in the 110th Congress under legislation introduced by former Reps. Ron Klein (FL-22) and Ginny Brown-Waite (FL-05).
- The bill number is H.R. 240.