Federal proposal would create disaster insurance

WASHINGTON – May 26, 2009 – U.S. Rep. Ron Klein (D-Fla.) introduced the Homeowners Defense Act in Congress last week. If approved by both houses and signed by the president, the Act would create a federal backstop for state-based catastrophe plans and lower homeowners’ premiums. In Florida, it would give private insurers a backstop should a major hurricane strike homes.

The bill failed to pass under the Bush Administration but stands a better chance this year, though it’s not a sure thing. The American Insurance Association (AIA) opposes the measure because it would supplant private market offerings and effectively make the federal government an insurance provider. The National Association of Insurance Commissioners, however, supports the change.

According to Rep. Klein, the bill, as proposed, would establish a voluntary federal/state consortium. He offers a full explanation on his legislative Web site: http://klein.house.gov/?sectionid=104§iontree=15,46,104

To read a full version of the bill, go to: http://www.govtrack.us/congress/bill.xpd?bill=h110-3355

© 2009 FLORIDA ASSOCIATION OF REALTORS®

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