By Bryan Boggiano
As the homeowner’s insurance crisis continues, one member of Congress might have a potential solution that could help alleviate the problem.
Rep. Jared Moskowitz, who represents Margate, introduced legislation on May 18, before the start of hurricane season, which begins on June 1. In 2022, the state had widespread damage from two storms: Hurricanes Ian and Nicole. The former, Ian, caused $112 billion in damage, mainly in southwestern and central Florida.
Since 2017, the state also faced billion-dollar disasters from Hurricane Irma (2017), Hurricane Michael (2018), and Hurricanes Sally and Eta (2020). Historic flooding also displaced residents in and around Fort Lauderdale.
“It’s critical for Floridians to have their homes insured in the event of severe damage,” he said in a press release. “However, with storms becoming stronger and more frequent, insurance companies are seeking higher and higher reinsurance amounts, and those costs, unfortunately, get passed down to consumers.”
Currently, insurance companies buy reinsurance to reimburse them following major claims events. But, with more storms and wealth at risk from hazards such as wind, rain, and storm surge, insurance companies require higher reinsurance. According to the press release, that cost is then passed down to consumers.
Under Moskowitz’s legislation, the federal government would issue post-event bonds to insurance companies to reduce financial risk. That, he contends, will lower insurance costs for residents.
Besides administrative costs, there would be no costs to the federal government. States can opt into the program, which is established by filing a state plan with the Federal Insurance Office.
States would also have access to low loan rates and would not have to tax insurers to establish pre-event catastrophe funds.
The program, however, would not cover daily claims. It would only be activated when a truly “exceptional” natural disaster exists.
“This legislation is a strong step towards stabilizing the insurance market and, most importantly, lowering rates for homeowners,” he stated.
- A University of Florida journalism graduate, Bryan plans to pursue geosciences at Florida International University for his master's. He has a strong interest in weather, entertainment, and journalism.
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