September 11, 2006

    Insurance Research Council Survey Shows Strong Support
For ProtectingAmerica.org’s Catastrophe Preparedness Plan

(Washington, D.C.) – By clear margins, Americans are rallying around the comprehensive plan for enhanced emergency preparedness, stronger building codes, and an end to taxpayer subsides for catastrophe recovery being advanced by ProtectingAmerica.org, a nationwide organization of first responders, leading disaster recovery experts, small and large businesses, and the nation’s largest writers of homeowners’ insurance.

According to an August 2006 survey by the Insurance Research Council (IRC), two-thirds of Americans support stronger building codes even when such codes would add to the cost of a home, and only a slight majority (58%) of survey respondents believes that emergency responders have adequate resources to help in time of need.  ProtectingAmerica.org has been calling for the enactment of legislation on the state and national level that directly addresses these issues by creating a stable source of funding for improved mitigation and code enforcement efforts, enhanced resources for first responders, better land use planning and improved emergency planning.

The survey also found strong opposition to programs and policies that subsidize the cost of insurance for people in high-risk areas.  ProtectingAmerica.org’s 'catastrophe fund' solution would end those subsidies by creating a rainy day fund financed by insurance premiums at actuarially sound rates that would significantly reduce the current system of after-the-fact, taxpayer money that bails out the uninsured following a catastrophic event.  According to a March 2006 report by the Brookings Institution, more than 11.5% of the $85 billion the government has committed for Katrina cleanup and reconstruction will be given to individuals and businesses that did not have private insurance.   This 'cat fund' would also provide a financial backstop that provides more protection at lower cost for consumers by creating additional capacity for the market that operates on a tax-exempt and non-profit basis.

'The American public is telling us that they do not feel prepared for a major catastrophe, and it is time for Congress and state legislatures to listen and to act,' said Robert W. Porter, executive director of ProtecingAmerica.org.

 'Clearly,  H.R. 4366 and its companion Senate legislation S. 3117, along with state catastrophe management bills, would create the public-private solution America needs to better prepare and protect itself from catastrophe,'  Porter said.

'ProtectingAmerica.org completely agrees with the findings that subsidies to disaster-prone areas must end.  Unlike the National Flood Insurance Program, our legislation utilizes private insurance company premiums, not taxpayer dollars.  In addition, premiums would be based entirely on risk, so people in high-risk areas will pay their fair share into the fund,' he said.

'In essence, this legislation will change the American catastrophe response paradigm from one of reacting and responding to one of preparing and protecting; from one where taxpayers subsidize risk to one where insurers and a privately-funded backstop cover losses following the onslaught of a mega-catastrophe,' he added.

The IRC findings echo the results of a ProtectingAmerica.org survey conducted earlier this year.  In particular, the ProtectingAmerica.org poll found that 63% of the public supported the creation of state and national catastrophe funds financed by insurance company premium dollars rather than the current taxpayer-subsidized program.  Support grew to 75% when respondents were informed that a portion of the investment earnings from such a fund would be used for homeowner education, mitigation and for strengthening first responders.

ProtectingAmerica.org was founded in 2005 and is co-chaired by former FEMA Director James Lee Witt and former Deputy Secretary of the Department of Homeland Security Admiral James Loy.  The organization’s mission includes the establishment of a comprehensive, integrated national catastrophe management solution that will better prepare and protect American families, communities, consumers and the American economy from catastrophe. 

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