Posted: 8/30/2011

Statement by Liz Reynolds
National Association of Mutual Insurance Companies
on the
Alabama Homeowners Insurance Affordability Commission

“As mutual insurers, owned by our policyholders, we understand what people experience in the face and aftermath of a natural disaster. And we commend Governor Bentley and the commission for seeking to find ways to make homeowners insurance more affordable for the people of Alabama.

“As the commission goes about its work, we know there can be no easy answers. Some may be tempted to give the government more control over insurance, but Alabama homeowners need only look to Florida to see that government-run insurance programs, ostensibly created to make insurance more affordable, always grow out of control. The result is always the same: every homeowner as well as every taxpayer ultimately is left to pay for even larger costs when the next catastrophe inevitably strikes.

“After the devastation wrought by Hurricane Katrina, NAMIC formed a task force to explore insurance issues affecting homeowners in areas vulnerable to natural catastrophes. Out of that task force came a set of several fundamental principles that we encourage the commission to keep in mind as it continues to examine potential solutions to the issue of homeowners’ insurance in Alabama.

“First among these principles is allowing insurers the freedom to use competitive risk-based pricing.  Another principle is the need for better education of consumers about the value of stronger building construction and improved building codes. And congressional reauthorization of the National Flood Insurance Program is another key principle.

“We believe these principles – more than any radical change to the state’s regulatory approach to insurance – will help make homeowners insurance in Alabama both more affordable and available.”

Contact: Brent Bahler
Vice President
Public Affairs
National Association of Mutual Insurance Companies
317-875-5250
bbahler@namic.org