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Miami Herald Backs a Federal Catastrophe Fund

In an August 17 editorial, the Miami Herald endorsed the creation of a federal fund to help pay for natural catastrophes. The newspaper notes many...
August 23, 2005

In an August 17 editorial, the Miami Herald endorsed the creation of a federal fund to help pay for natural catastrophes. The newspaper notes many positive developments since 1992's Hurricane Andrew which served to stabilize the insurance markets in the state, including the creation of the Florida Hurricane Catastrophe Fund. "Still, the legislative changes aren't enough," the editorial says. "Last year's hurricanes exposed weaknesses in the CAT fund. It isn't big enough to handle the kind of multiple-storm events Florida may see in the future. Meanwhile, Florida's low-tax structure, its penchant for coastal development and its 'come-on-down' attitude toward population growth is a formula that guarantees more headaches for insurers and homeowners."

The Herald goes on to say that now is the time to consider a solution that goes beyond the Florida state line.

"It is clear that Florida cannot manage the problem alone, nor should it," it concludes. "What is needed is a federal catastrophe fund that can act as a backup to major events, such as terror attacks, earthquakes, multistate floods and tornadoes, and single-season multiple hurricanes. U.S. Rep. Mark Foley (R-Florida) has proposed a comparable plan, though it is not identical. Under his plan, insurers would contribute to a backup emergency pool for catastrophic events - a move in the right direction."

Foley Introduces Disaster Insurance Reform (5/27/05)

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