WASHINGTON — Florida homeowners are one step closer to obtaining available and affordable homeowner’s insurance and ending the ongoing crisis that has plagued the state.
The U.S. House approved legislation Thursday night on a 258-155 vote that aims to stabilize the catastrophe insurance market by expanding private industries’ capacity to cover a natural disaster and help states manage risk.
Under the Homeowner’s Defense Act of 2007, a bill introduced by Reps. Tim Mahoney, D-Palm Beach Gardens, and Ron Klein, D-Boca Raton, a federal program would be created to assist state-sponsored insurance programs on covering losses from natural disasters. The bill would set up a federally funded office where states could go to receive assistance for some of the catastrophe risk they have assumed.
The legislation would allow multiple states to join together to help pay for each other’s disaster costs, a more appetizing role for investors to assume, and then transfer the cost to the private markets through catastrophe bonds and reinsurance contracts.