This Congressional Research Service report introduces its subject: "Some insurance and disaster policy experts suggest the time has come to implement a federal insurance or reinsurance program for earthquakes and other seismic risks. Conversely, other experts question the need for such a program."
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And summarizes its conclusions: "Given that the states have acted to provide catastrophe funding for the small to moderate-sized hurricane and earthquake, Congress might consider a strict economic approach that calls for fairly mild reforms of the insurance industry — that still allows the possibility of people being uninsured (and not getting relief), and thereby uses that outcome to encourage the public to engage in loss-prevention measures. Alternatively, Congress might consider a potentially economically less efficient approach that calls for the creation of a federal disaster insurance system at the higher layers of coverage. Such legislation might, however, result in overinvestment in hazard-prone areas. In pursuing this potentially less efficient solution, the approach might be one of finding the least expensive way of making sure everyone is protected from major economic losses from natural disaster."
CRS Report for Congress: Tsunamis and Earthquakes: Is Federal Disaster Insurance in Our Future? (April 6, 2005).
Posted by dougsimpson at September 26, 2005 06:52 PM