Biloxi — Although it will be a few weeks before the final rate increase in the Wind Pool insurance is known, it will be nowhere near the 400% rate hike insurance companies requested. Gov. Haley Barbour and Insurance Commissioner George Dale brought good news to South Mississippi homeowners with the June 14th announcement that $50 million in state-administered federal grants has been set aside to mitigate the expected increase in the cost to consumers who have these policies.
“Mitigation of these costs is integral to the recovery of the Mississippi Coast. If insurance becomes unaffordable, financing and rebuilding efforts become much more difficult,” the governor said.
He intends to use $30 million this year and $20 million next year in Community Development Block Grant funds to offset these costs, making policies more affordable for consumers who need the protection.
This mitigation plan is similar to the ratepayer mitigation plan designed to help South Mississippi customers of utilities defray potential additional costs resulting from utility infrastructure restoration. As part of an approval process through the U.S. Department of Housing and Urban Development, the Governor’s plan for Wind Pool mitigation and the ratepayer mitigation plan are open for public comments. These comments must be received by June 24 to be considered.
Dale said he was thankful to work with a governor who has the know-how to develop such a plan. “This will result in considerably less of an increase in the Wind Pool,” he said, “and it will protect the integrity of the insurance-buying public in the state. I can’t say enough about what the governor did.”
The commissioner said information will be resubmitted to actuaries and the numbers will be crunched. He hopes the rate increase will be determined within a few weeks. There is still $12 million to pay into the pool but policy holders are already paying $8 million.
“It’s not going from zero to $12 million,” Barbour said. “We don’t know about future increases from other storms. This is a solution that’s here and now because the Legislature is a long way from meeting.”
Barbour and Dale noted that two legislative committees appointed to study the issue will continue to address all facets for long-term solutions.
“We pray we don’t have a storm this year,” Dale said. “The Wind Pool never anticipated a storm like Katrina and we’re taking action to recover from it.”
Dale also said the whole state needs to be involved in solving insurance matters.
Of all the insurance written in Mississippi, 24% is written in the six coastal counties; 26% is written in the metro Jackson area; and 25% is written in the northern counties that border Tennessee.
“We have three major insurance areas and the rest of the state is not heavily populated,” he said. “It will take the entire state participating for the Coast to recover.”
The two officials, one a Democrat and one a Republican, said it was the right thing to do to work together to help coastal residents recover.
“We agree that keeping insurance affordable and available is a priority to the recovery of the Coast,” Dale said. “Finding ways to do that has been and will continue to be a priority for the Mississippi Insurance Department. An important part of that process is making sure the Wind Pool remains solvent so that people living on the Coast have access to the coverage they so badly need during hurricane season.”
Contact MBJ contributing Lynn Lofton at firstname.lastname@example.org.