Insurance Risk Pools Could Help Homeowners on Coast

At a conference in Oxford, members of Mississippi’s insurance industry have been discussing new ways to insure property on the coast. Cari Gervin explains.

The sour economy has consumers unable to pay higher insurance rates. But after Katrina and last summer’s coastal hurricanes, the insurance industry says it needs to charge more.

One possible solution? A public-private partnership that would pool the risk across several states. Larry Cox is a professor at the University of Mississippi’s business school.

“And right now in Mississippi, we’re being penalized because of what happened with Katrina. It just happened to come ashore where we are. So I think there has to be a multi-state solution and that’ll probably be promoted by the federal government, so that there is a solid financial mechanism in the event of another Katrina.”

Chris Boone works for BancCorp South Insurance Services, and he says the idea is a good one.

“Frankly it’s probably the best plan that’s been put forward so far. We’ve got to do something to stabilize the marketplace for coastal Americans.”

However, both say that with the pressing economic problems facing Congress, a plan is unlikely to be happen anytime soon. For MPB News, I’m Cari Gervin in Oxford.