This hearing will come to order.
Today we begin the first in a series of hearings
to examine the availability of homeowners' insurance in disaster-prone
All too frequently, we hear stories of homeowners
unable to obtain insurance in areas subject to hurricanes and
earthquakes. In the worst of cases, the high cost of homeowners'
insurance in these areas effectively prohibits the purchase of
insurance, leaving homeowners at risk of homelessness in the event
of a catastrophic loss.
More and more evidence indicates that the rising
toll from natural disasters is placing a significant strain on
homeowners' insurance markets in many parts of the country. Most
recently, Hurricane Andrew in Florida and the California Northridge
Earthquake have led many insurers to withdraw from these vulnerable
areas. In some cases, insurers have stopped underwriting business
in these areas entirely, leaving homeowners with very little opportunity
for protection against catastrophic loss. These trends are disturbing,
and represent a real crisis for homeowners across the country.
Three states have created their own programs to address
an insurance availability crisis - California, Florida and Hawaii.
In the face of the growing threat of natural disasters, a number
of other states are considering similar proposals. Forecasters
predict that both the East and Gulf Coasts of America may be entering
a long-anticipated, prolonged siege of more frequent and more
destructive hurricanes that may last up to two decades. More frequent
and more forceful storms coupled with the increase in population
and development in coastal areas mean that disasters resulting
in multi-billion losses will become increasingly common. Between
1988 and 1994, the Federal government spent more than $45 billion
on natural disaster assistance. Experts note that it may only
be a matter of time before a single storm exacts $50 billion in
To address the issue of homeowners' insurance in
vulnerable areas, I have introduced H.R. 219 - The Homeowners'
Insurance Availability Act of 1997. Members of Congress from both
sides of the aisle will be working in partnership with the Administration,
the industry, and state insurance program administrators to arrive
at the most appropriate Federal solution to this growing problem.
In these efforts, I must acknowledge my great respect for the
late Congressman Emerson and his valiant efforts over the last
several years to bring this issue to light. It is my great pleasure
to have Congresswoman Emerson before us today.
I intend to hold a number of field hearings on possible
legislative solutions during the next few months, and conclude
with a final hearing here in Washington, D.C. It is my hope that
legislation will be ready for mark up in the Full Committee by