Taxpayers May Face Hurricane Tab

Article from the WSJ.

"As hurricane season begins, Democrats in Congress want to nationalize a chunk of the insurance business that covers major storm-damage claims.

The proposal -- backed by giant insurers Allstate Corp. and State Farm Mutual Automobile Insurance Co., as well as Florida lawmakers -- focuses on "reinsurance," the policies bought by insurers themselves to protect against catastrophic losses. The proposal envisions a taxpayer-financed reinsurance program covering all 50 states, which would essentially backstop the giant insurers in case of disaster."

Of course the insurance companies are in favor with this idea - another re-insurance company with essentially zero default risk, forced to compete on the open market, is a great idea.

Taxpayers who live in areas that are likely to have no damages from "storm-damage" subsidize others does not make a lot of sense. The state of Florida already offers insurance to some degree. Perhaps the government and the taxpayers would be wise to see how this plays out in hurricane weather rather than the sunshine. I think, and I might be wrong, that another major hurricane would bankrupt Florida.