It really wasn’t so long ago when the stretch of real estate from Miami north past Vero Beach was ravaged by a quartet of nasty storms during a 13-month period, causing billions in property damage, in addition to loss of life and frayed nerves anytime something stronger than a light drizzle was forecast.
As I reflect on the recent turn of events in Houston, plus hurricanes Irma and Jose sweeping their way westerly through the Atlantic, PLUS the fires raging through the Pacific Southwest, I think it’s a really good time to have a national discussion about nationwide disaster insurance, which I believe would make life a lot better for individuals impacted by these kinds of situations.
Individuals like ... for example ... me.
According to preliminary estimates, Hurricane Harvey may inflict as much as $30 billion in damages on homeowners. But only 40 percent of that may be covered by insurance - and of that, the federal government will bear the biggest liability.
When natural disasters strike, concern about the health, safety and welfare of loved ones is paramount. It should be the first priority. But a close second should be the financial health and welfare when it comes to recovering from such a disaster.
This is not the first time such a position has been advocated, for a nationwide disaster insurance program to be implemented. The concept has been discussed in Washington, D.C. for years, but with minimal results - which is surprising, given the criticism the Federal Emergency Management Agency (FEMA) has been subjected to the past decade or more. Although insurance is largely limited by location, natural disasters occur without regard for such boundaries; hurricanes don’t hit the Florida-George line and say, “Whoops! Gotta stop here!” When Mount St. Helen blew her stack in 1980, the eruption column rose 80,000 feet into the atmosphere and deposited ash in 11 states plus parts of Canada.
No matter where you live, you can’t escape the possibility that a terrible natural disaster might one day happen to your home or business.
The problem is, current homeowners’ insurance policies are designed to be specific, largely to limit risk. But policies are riddled with lists of exclusions and specifications that could leave you uninsured when you need it most. For example, flood damage is excluded under standard homeowners and renters insurance policies, and while you can get replacement cost coverage for the structure of your home, only actual cash value coverage is available for possessions.
Proponents of natural disaster insurance call for blanket coverage across the nation, meaning that whether you face fire, flood, tornado, earthquake or hurricane - or any other such disaster that comes your way - you will have adequate coverage to salvage your home.
As noted previously, national disaster insurance would create a much wider pool for risks by encompassing communities across the nation that will not likely face natural disasters every year - or at least at the same time, which would make it profitable for companies. Better yet, it’s not a hard idea to implement - the national flood insurance program already gives us the template. And it would dramatically reduce the federal government’s financial responsibility to rebuild homes and businesses, allowing leaders in Washington, D.C., to use our tax dollars more wisely.
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