Clinton Criticizes US Disaster Insurance System

Democratic Presidential candidate and Senator, Hillary Rodham Clinton, said that the US is unprepared for a serious disaster. In an article by Time, she indicated that the Bush administration had made a grave error in putting the Federal Emergency Management Agency (FEMA) under the auspices of the Homeland Security Department. Clinton also advocated more focus on severe weather events and other disasters before they occur, so that prevention of serious damage is also a focus and not just mitigation.

Clinton is proposing a national catastrophe insurance fund. This fund would provide insurance for all kinds of catastrophes, including earthquakes in California, tornadoes in the midwest or hurricanes on the Gulf and eastern seaboard. Clinton said that insurance costs have become astronomical for homeowners, especially for wind coverage, and there should be a national system that keeps coverage affordable. Clinton said, "We can't put so many millions of people at risk that they can't afford to meet the insurance requirements. We've got to do something."

We couldn't agree more.

Monique L. Attinger 

3 comments
Posted by Thad Guy on May 29,2007 at 6:21 PM

You have a valid point that it is not quite feasible to abandon development which is already in the "wrong" place.

This does bring up the fact that some of this development wasn't in as risky a location when it was built. If one is trying to deal with this problem on a large scale, a notable amount of attention needs to be paid to factors like the preservation of barrier islands and wetlands as well as the prevention of global warming.

Posted by editor@insuranceguide101.com on May 29,2007 at 5:23 PM

Well, if all fiscal and monetary markets are gone... insurance is likely about as helpful as any other economic tool that depends on paper money!

However, your comment about high-priced insurance actually having a purpose is correct. It does discourage development in the "wrong" areas.  The issue is that even those who are looking for insurance in "established" areas are having an impossible time to get it -- and in some cases, we've built whole cities in places we "shouldn't" have. Are we going to abandon vast areas of Florida or the Gulf coast? Based on your "flood plain" argument, no one should be rebuilding New Orleans.

Posted by Thad Guy on May 29,2007 at 11:04 AM

I agree that FEMA needs some serious work. However, doesn't the high price of some insurance plans also serve a purpose? Presumably flood insurance would be the most expensive for those building houses in flood planes. By making it very expensive to build in the most risky places it can strongly encourage people to consider risk when developing an area.

On a slightly different topic, I would be happy to help people find affordable insurance against the destruction of all fiscal and monetary markets. :)

comic:

http://www.thadguy.com/comic/tremendous-disaster-insurance/87/

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