Flood Insurance for All

Dickie Scruggs wants to change the terms of home insurance policies ex-post so that hurricane victims get more money.

As I see it, there are only two policy options here that ensure home and flood insurance will be available in Mississippi in the future: 1a) Require that insurance companies pay flood damages even without flood insurance, AND 1b) require that every single policy-holder pay back-dated flood insurance premia, from the time they started their current policies, OR 2) enforce the terms of the contracts as originally written.

I personally would go with 2, however I can see insurance companies going for a version of 1 that doesn't sound so harsh. Requiring that everyone have flood insurance (and/or pay for backdated coverage) is an expensive and unnecessary idea, but if one wants big insurance company payouts today, it is the only policy consistent with the long-term public interest of making flood insurance available to those who want it. Of course, it's a terribly complicated idea, but that won't stop officials from making such a drastic institutional change almost unavoidable.

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This page contains a single entry by Kevin published on September 13, 2005 8:44 AM.

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