That’s the proposal sponsored by Rep. Debbie Wasserman Schultz (D-FL), it’s a measure in the US House of Representatives that would establish a commission to study whether the US could create and administer a national catastrophe program to backup traditional insurance. The reason for this proposal is because a lot of insurers have pulled out of insuring coastal areas given the recent hurricane damages and the government needs to step in to help insurers out so regular folks don’t get screwed.
For example, All State won’t offer new homeowner policies in New York coastal areas and has dropped wind and hail damage for 30K homeowners on Louisiana coasts.
Wasserman Schultz said the program would need to hedge any risk exposure to protect taxpayers and ensure that it would not become a public subsidy for coastal residents. Some insurance companies have stopped offering homeowners insurance for residents along coastal areas, especially in the aftermath of a busy 2005 hurricane season, CongressDaily reported.
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