Lauren Tara LaCapra
Yet many coastal residents are hit hard by the premium levels. Louisiana and Mississippi are among the priciest U.S. markets for homeowners insurance, but are among the states with the lowest median income.
Wind Protection Outside the NFIP States have also tried to make insurance more affordable by subsidizing it, through entities like Florida's Citizens Property Insurance Corp. But Citizens has become a fiscal nightmare because it doesn't price policies according to risk, or reserve adequate funds to cover damages. "Predictably, it went broke in both 2004 and 2005," says Hartwig. "The Louisiana and Mississippi programs both also went broke in 2005 after Hurricane Katrina. Every last one of them has gone bankrupt over the last 20 years, at least once." Connecticut Sen. Chris Dodd offered another proposal to provide $200 million a year in federal loans for storm-proofing homes and businesses. He also proposed a one-time tax credit for coastal residents who face skyrocketing premiums. Insurers are behind Sen. Dodd's legislation because it doesn't sap their business and incentivizes people to protect the assets they cover. Others support the bills because they would help coastal residents without putting a large financial burden on all taxpayers. Still, those on the coast say it's not enough. "We need to ensure that homeowners are offered a full spectrum of insurance products to protect themselves and their investments," says Mississippi Sen. David Vitter. The Bottom Line Where you stand depends on where you call home -- or time share. Those living on the flood plain will almost certainly be better protected at a relatively low cost, even if the NFIP's below-market premiums rise. Extending protection to renters, business owners and vacationers or adding wind coverage would sweeten the deal further.
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