Groups Voice Opposing Views On U.S. Catastrophe Policy

The legislation was included in a bill passed by the House in 2007 to reauthorize and reform the National Flood Insurance Program. That measure failed to pass the in the Senate and the flood program was extended until Sept. 30.

In opposition to that legislation is the SmarterSafer.org, a group which supports a bill providing federal incentives for mitigation measures and an end to federal policies that encourage development in regions that are vulnerable to hurricanes and other natural disasters.

The SmarterSafer.org approach would primarily rely on the current system of private insurance and reinsurance programs to pay disaster claims.

ProtectingAmerica.org in the report it issued, written by Jon Orszag, a former economic advisor to President Clinton, and economist Doug Fontaine, said the Homeowners' Defense Act of 2009, H.R. 2555, is an "effective vehicle to help deal with the financial devastation following major natural catastrophes."

Besides being effective in dealing with the financial problems states with windstorm reinsurance programs have in funding payment of claims after an event, H.R. 2355 would provide "assurances to homeowners that they will have the ability to rebuild and recover in the aftermath of a massive hurricane or earthquake," the report said

Mr. Orsag said in a statement that dealing with massive hurricanes and earthquakes "make it imperative that the nation, in order to protect American families, move as quickly as possible to enact a comprehensive, integrated program that is economically sound and marshals the resources of the private and public sectors."

The proposed legislation, he said, "would leverage public and private resources and mandate more comprehensive prevention and mitigation."

As such, he said, "the proposed legislation represents an economically sound solution to address the inefficiencies that plague the current system of disaster relief."

Officials at SmarterSafer.org disagreed saying H.R. 2355 "would actually have the opposite effect."

SmarterSafer.org is supporting legislation recently introduced by Rep. Bennie Thompson, D-Miss., chairman of the Homeland Security Committee.

This legislation would provide incentives for homeowners to strengthen their dwellings and provide funding for innovative first responder programs.

Supporters of the bill say another study, by the National Institute of Building Sciences, contends that for every dollar spent on mitigation, approximately four dollars are saved in reduced losses.

The group argued that the better approach is to implement measures that end federal policies that encourage development in regions that are vulnerable to hurricanes and other natural disasters.

"While well-intended, our concern is that the Homeowner Defense Act would increase development in vulnerable coastal areas, putting more people at risk," said Ed Hopkins, Director of Environmental Quality Program at Sierra Club.

Instead, he added, coastal areas and wetlands should be protected from intensive development to buffer communities from hurricanes."

Mr. Hopkins said that the appropriate central focus of legislation to address catastrophic risk "should be strengthening homes and businesses to make them more resilient. That would do more to protect people and their property."

The Homeowners' Defense Act of 2009 is sponsored by Rep. Ron Klein, D-Fla. He represents the Palm Beach County area.

It would help states create state-sponsored insurance funds to bundle voluntarily their catastrophic risk with one another through a National Catastrophe Risk Consortium.