North Dakota Insurance

Federal law requires that owners of properties in California and in other areas of seismic risk to purchase earthquake insurance - and therefore taxpayers, reduce the funding needed to care for victims without insurance — collects support within the framework of the Southern California earthquake.

A bill before Congress was co-sponsored by nearly 100 members of legislatures, with more expected as Congress reconvenes later this month, Jack Weber, director of the natural disaster coalition, a group of insurance companies, consumer groups disaster and aid specialists to support the bill.

And John Garamendi, the insurance commissioner’s California this week approved the bill in Congress, entered the insurance members of the Commission of 17 other countries already on approach.

The hearings on the bill, for next week, there may be a delay because of earthquakes in Los Angeles, but sponsors of the bill say the interest of the legislation is growing. “I expect that support to grow more, if people see the costs for the government is not with regulations to cover the costs of disasters to the private sector,” said Senator Ted Stevens, a Republican of Alaska, is a sponsor of the bill.

Norman Y. Mineta, a Democratic representative from San Jose, California, said the Clinton administration appeared to favor the bill so far, although the Office of Management and Budget, it has not yet been analysed in detail .

Some conservative legislators said they were usually the suspicious programs of the Federal Republic, civil protection as Bill is a possibility of reducing the budget of the Confederation.

“You have to have compassion for people suffering from a disaster, but it is not fair to expect taxpayers to other parts of the country to maintain the lifting of the tab,” said Curt Weldon, Republican of Pennsylvania. “This law provides incentives for local governments and owners protect themselves against risks they know.”

Some consumers have also indicated their support. “Our mission is to lead and insurance to buy a car, a home is just another area in which the needs of society appeal to insurance companies,” said Linda F. Golodner, Director of the National Consumer League in Washington, said some homeowners, it would be preferable, without doing so.

Given that many homeowners in California to not buy insurance covers damaged by the earthquake, only a small portion of losses in Los Angeles are covered by insurance. Although estimates of losses as high as the range of $ 15 billion to $ 30 billion costs for insurance companies has been estimated as low as $ 1 billion or a little more. The difference will be absorbed by individuals and companies or by federal funds and state. Considering the reduction of expenditure

From 1977 to 1990 - a period that are not costly, disasters such as last year, floods in the Midwest and Hurricane Andrew in 1992 - Execution by the Federal Emergency Management Association, a total of 4.9 billion, while other federal agencies spent $ 2.4 billion. Approximately one third of the 15 billion dollars in disaster relief in regions of loans from the Small Business Administration and the Farmers Home Administration before 1992, their payment obligations, another $ 5 billion in federal spending.

Coopers & Lybrand, the accounting is required, in a study conducted on behalf of the Natural Disaster Coalition, said that the disaster of civil protection intends to reduce expenditures and the Federal Republic of reducing the budget deficit of at least $ 700 million , And perhaps as much as $ 7.2 billion over five years.

The Bundesanstalt für cash should also win if the increased use of earthquakes, insurance unless loss of tax deductions on individual statements, or if damage caused by the earthquake was for precautionary measures , As the introduction of stricter building standards. Preparation concerned

Robert E. Hoyt, professor of insurance at the University of Georgia, said federal disaster support fewer incentives for homeowners, businesses and local governments for disaster preparedness. “It is not wrong, if we want the society to subsidize people living in areas at high risk,” he said. “But the problem is that if you isolate people from the full cost of their decisions, they can not make good decisions.”

He said that local governments willing to increase its base of calculation by the promotion of development were ready to adopt rather lax in the construction and save costs for planning anti-seismic and roads, when they know that federal assistance after a disaster.

The linchpin of civil protection of the Bill is a special fund by insurance companies, like many cases in areas prone to disasters like hurricanes and earthquakes, it would be used for insurers solvent If the losses resulting from a disaster are too great. Extension of the Basic protection

If the fund is not sufficiently demonstrated that companies can borrow from the United States Treasury, but would have to repay loans with interest. If companies want protection, given that most of the sector, they would be required to cover earthquakes, volcanic activity and tidal waves as part of the coverage of services of general interest for homeowners across the country - are not considered as additional option, since it is now the case.

In some states like North Dakota, the cost of coverage would own negligent, and they would not be expected to subsidize Californians, would pay a higher price.

Insurance companies estimate that the collection of premiums for the insurance of homeowners all earthquakes in California, instead of the minority, purchase, choose to live coverage, because in areas particularly risk, they can reduce the cost of earthquake coverage up to $ 55 for each policy, now averaging $ 240

The draft law on civil protection request to 5 per cent to 10 per cent of homeowners’ premiums for coverage of earthquakes are used for grants to state and local governments for better implementation of standards construction and other measures, the reduction of damage and cost of disasters. Governments, which are not implementing the construction and develop contingency plans would not be for grants, and could be denied certain Confederation types of disaster.