U.S. disaster preparedness has improved little in the five years since the largest natural disaster in a century, a coalition of first responders and catastrophe experts says.
“When it comes to shoring up the financial system that stands behind homeowners, communities and insurers, we are no better off than we were when Katrina struck,” says James Lee Witt, former Director of the Federal Emergency Management Agency (FEMA), and the current co-chair of ProtectingAmerica.org. “Indeed, given the global economic conditions, we may even be worse off than we were five years ago.”
Witt says that America needs a comprehensive catastrophe preparation of protection program like the one contained in the Homeowners Defense Act of 2010 (H.R. 2555). The bill was approved by the House Financial Services Committee in April with bipartisan support, but is still awaiting action by the full House of Representatives.
The program envisioned by the act would improve mitigation and public education, augment first-responder training and equipment and would create a financial backstop to assure that consumers have the funds to repair, rebuild and recover in the aftermath of a massive natural catastrophe. To do so, the bill would create a privately funded public partnership that helps to pre-fund the financial costs and facilitate the risk participation of the private sector, expand the availability and sustainability of the catastrophic insurance system and provide potent incentives for residential property owners to undertake catastrophe loss mitigation efforts.
According to Witt, the current financial model for catastrophe recovery that relies initially on insurers and reinsurers to cover the first level of losses following a massive event, but ultimately relies on federal taxpayers to cover the rest is outdated.
“This is an unfair system that rewards risky behavior, does nothing to encourage prevention and mitigation efforts and ultimately drains the federal treasury of hard-earned tax dollars paid by working men and women in every state in the nation,” Witt says.
