Disaster Insurance: Congress Steps in Where Firms May Not

Woody Guthrie could say it better, but it's happening from Sea to Shining Sea.

As homeowners from the California to the Gulf Coast to Long Island, N.Y., know, insurance premiums are on the rise — or in many cases, completely unavailable — as insurers get increasingly cagey about offering policies on homes that could be hit by a hurricane, wildfire, major flooding or other catastrophic natural disaster. (Including several on the global warming hot list; that is, those natural disasters that get nastier as the world gets hotter.)

Already the major insurers of private insurers — those businesses that buy up insurance policies in bulk to keep insurance agencies from shouldering too much risk — have warned that global warming has to be taken into account when funding policies. Now, Congress is looking to get in the game, in part to fill the gap left by private insurers.

The House has passed a law, and debate is alive in the Senate, that would allow states to band together to create catastrophe funds. The idea is that spreading the risk among several states that face similar concerns over the same natural disasters will limit the damages to any one state hit hard at any one time. If the cost of rebuilding exhausts that coffer, the federal government would offer low-interest loans.

Whether or not this is the right strategy — President Bush has threatened a veto — it's good that the country gets serious about thinking about the homes in harm's way. For years, hurricane experts have warned that the greatest threat to life and property is not from global warming, but the lemming-like march to the sea that has seen so many millions of homes built in harm's way.

A strategy that not only gives a measure of protection to those communities that have already been built, but also recognizes the risk of future building, would be the wisest course of action. It was the Dust Bowl that gave Guthrie his start in the truth-singing business. With more natural disasters on the docket, America's looking for a good troubadour.

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