By Billy House
Media General News Service
Media General News Service
Democratic presidential candidate Christopher Dodd says he's proposed a short-term plan to help property owners.
By File Photo
By File Photo
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WASHINGTON — An effort led by two freshmen Florida congressmen to address skyrocketing home insurance costs tied to national disasters may have been hijacked by presidential politics Thursday.
Just as the U.S. House was passing legislation to create a national fund that its sponsors say will make disaster insurance more available and affordable for coastal homeowners and businesses, Sen. Chris Dodd of Connecticut abruptly announced he’d come up with his own short-term plan to help property owners.
Dodd, a Democratic presidential candidate, is chairman of the powerful Senate Banking Committee that oversees most insurance issues.
“This smacks a lot of presidential politics,” reacted national pollster John Zogby of Dodd’s timing. “This is a huge issue in Florida. And Florida is huge in the presidential primaries.”
Dodd’s plan came just two days after Sen. Hillary Rodham Clintonof New York joined with Florida’s Democratic Sen. Bill Nelson in introducing in the Senate a companion to the House bill.
The House bill, which passed on Thursday 258-155, was sponsored by Democratic Reps. Ron Klein of Boca Raton and Tim Mahoney of Palm Beach Gardens. It had bipartisan backing, with GOP Rep. Ginny Brown-Waite of Brooksville among those active in helping to get the bill passed.
Dodd, who also is from a state that is headquarters to many insurance companies, has been helping to block any such legislative action in the Senate this year. The insurance industry, for the most part, has been lobbying against such legislative efforts.
That includes the Klein-Mahoney bill passed in the House to create a national catastrophe consortium or fund.
That legislation would pool federal and state resources to diversify and spread the risk and disaster coverage – rather than have disaster-struck states absorb the costs alone.
The idea is that these savings could be passed on to consumers.
At the time of Clinton’s announcement on Tuesday that she was introducing a companion bill in the Senate, the only action that Dodd’s Senate committee had taken was to approve language to create a “study commission” to look into what role, if any the federal government could play in disaster insurance.
But that bipartisan panel would not even have to report back to Congress until late in 2008.
“The current insurance market isn’t responding fast enough to the new and heightened risks that many homeowners face,” said Clinton, who said “fresh and innovative” approaches are needed.
In his sudden announcement Thursday, Dodd said he was introducing two of his own bills to help homeowners and businesses lessen the financial strain caused by natural disasters.
“We need to explore any and all long-term solutions to helping homeowners and business owners,” Dodd said. “But these families need immediate assistance to help reduce their costs.”
Dodd emphasized his ideas were short-term steps, and that longer-term solutions were needed.
“Each year hurricanes and other natural disasters devastate and destroy homes, communities and lives. We shouldn’t worsen the problem by allowing the costs of escalating insurance expenses to ruin homeowners and business owners financially,” said Dodd.
Dodd said his first measure would provide tax credits to homeowners who face skyrocketing insurance premiums in coastal areas. They would be available for one year. No dollar estimate has been made for how much that would cost the U.S. treasury.
Hisother measure would provide as much as $200 million in federal funds to states to help property owners elevate endangered portions of homes, build safe rooms, and install other devices such as storm shutter to protect properties.
Dodd’s announcement drew praise from a major insurance industry organization.
“Based on an initial look, it appears Sen. Dodd is offering market-oriented approaches that focus on mitigation, and do not distort the true costs of insuring risks and do not create government programs that result in low-risk policy-holders subsidizing high-risk ones,” said Dennis Kelly, spokesman for American Insurance Association.
As for the House’s Klein-Mahoney bill, Kelly said, “we always have a concern with any legislation that creates a government entity that interferes with the private market.”
The Clinton-Nelson companion version of the bill could face a bumpy road. One reason: is must first clear Dodd’s Banking committee, where there has not yet been any action scheduled on it.
Dodd’s staff insisted that the bills he announced Thursday were not a reaction to Clinton’s embrace of the Klein-Mahoney bill. In fact, they said he’d been working on the legislation for several months.
In a statement, a diplomatic Nelson noted that Congress is for the first time “taking a serious look at creating a much-needed national catastrophe assistance program to brace homeowners against national disasters – and, disastrous insurance rates.”
“Now, the head of the Senate Banking Committee is hearing the pleas of homeowners,” said Nelson.
During the House floor debate, several lawmakers from other states questioned whether taxpayers who do not live in disaster-prone coastal states should have to help pay for such a catastrophe fund.
And Chris Shays, a Republican who like Dodd is from Connecticut, called the Klein-Mahoney bill “practically fatally flawed.” He said it is an “overreach” that could potentially expose taxpayers nationally to “massive liability.”
Just as the U.S. House was passing legislation to create a national fund that its sponsors say will make disaster insurance more available and affordable for coastal homeowners and businesses, Sen. Chris Dodd of Connecticut abruptly announced he’d come up with his own short-term plan to help property owners.
Dodd, a Democratic presidential candidate, is chairman of the powerful Senate Banking Committee that oversees most insurance issues.
“This smacks a lot of presidential politics,” reacted national pollster John Zogby of Dodd’s timing. “This is a huge issue in Florida. And Florida is huge in the presidential primaries.”
Dodd’s plan came just two days after Sen. Hillary Rodham Clintonof New York joined with Florida’s Democratic Sen. Bill Nelson in introducing in the Senate a companion to the House bill.
The House bill, which passed on Thursday 258-155, was sponsored by Democratic Reps. Ron Klein of Boca Raton and Tim Mahoney of Palm Beach Gardens. It had bipartisan backing, with GOP Rep. Ginny Brown-Waite of Brooksville among those active in helping to get the bill passed.
Dodd, who also is from a state that is headquarters to many insurance companies, has been helping to block any such legislative action in the Senate this year. The insurance industry, for the most part, has been lobbying against such legislative efforts.
That includes the Klein-Mahoney bill passed in the House to create a national catastrophe consortium or fund.
That legislation would pool federal and state resources to diversify and spread the risk and disaster coverage – rather than have disaster-struck states absorb the costs alone.
The idea is that these savings could be passed on to consumers.
At the time of Clinton’s announcement on Tuesday that she was introducing a companion bill in the Senate, the only action that Dodd’s Senate committee had taken was to approve language to create a “study commission” to look into what role, if any the federal government could play in disaster insurance.
But that bipartisan panel would not even have to report back to Congress until late in 2008.
“The current insurance market isn’t responding fast enough to the new and heightened risks that many homeowners face,” said Clinton, who said “fresh and innovative” approaches are needed.
In his sudden announcement Thursday, Dodd said he was introducing two of his own bills to help homeowners and businesses lessen the financial strain caused by natural disasters.
“We need to explore any and all long-term solutions to helping homeowners and business owners,” Dodd said. “But these families need immediate assistance to help reduce their costs.”
Dodd emphasized his ideas were short-term steps, and that longer-term solutions were needed.
“Each year hurricanes and other natural disasters devastate and destroy homes, communities and lives. We shouldn’t worsen the problem by allowing the costs of escalating insurance expenses to ruin homeowners and business owners financially,” said Dodd.
Dodd said his first measure would provide tax credits to homeowners who face skyrocketing insurance premiums in coastal areas. They would be available for one year. No dollar estimate has been made for how much that would cost the U.S. treasury.
Hisother measure would provide as much as $200 million in federal funds to states to help property owners elevate endangered portions of homes, build safe rooms, and install other devices such as storm shutter to protect properties.
Dodd’s announcement drew praise from a major insurance industry organization.
“Based on an initial look, it appears Sen. Dodd is offering market-oriented approaches that focus on mitigation, and do not distort the true costs of insuring risks and do not create government programs that result in low-risk policy-holders subsidizing high-risk ones,” said Dennis Kelly, spokesman for American Insurance Association.
As for the House’s Klein-Mahoney bill, Kelly said, “we always have a concern with any legislation that creates a government entity that interferes with the private market.”
The Clinton-Nelson companion version of the bill could face a bumpy road. One reason: is must first clear Dodd’s Banking committee, where there has not yet been any action scheduled on it.
Dodd’s staff insisted that the bills he announced Thursday were not a reaction to Clinton’s embrace of the Klein-Mahoney bill. In fact, they said he’d been working on the legislation for several months.
In a statement, a diplomatic Nelson noted that Congress is for the first time “taking a serious look at creating a much-needed national catastrophe assistance program to brace homeowners against national disasters – and, disastrous insurance rates.”
“Now, the head of the Senate Banking Committee is hearing the pleas of homeowners,” said Nelson.
During the House floor debate, several lawmakers from other states questioned whether taxpayers who do not live in disaster-prone coastal states should have to help pay for such a catastrophe fund.
And Chris Shays, a Republican who like Dodd is from Connecticut, called the Klein-Mahoney bill “practically fatally flawed.” He said it is an “overreach” that could potentially expose taxpayers nationally to “massive liability.”