Why should the federal government get involved when the states already have wind pools and FAIR plans?
One federal wind and flood pool can spread coastal risk much more efficiently than dozens of state risk pools. State-by-state wind pools or FAIR plans are not economically or politically capable of spreading risk or of building up sufficient reserves to handle major hurricanes. For example, Mississippi has three counties on the Gulf of Mexico and 79 inland counties. Alabama has two counties on the Gulf. South Carolina and Georgia each have only six counties on the Atlantic. The federal multiple peril insurance, however, can spread the risk geographically so that even if one or two states are hit hard in a year, the pool as a whole would be stable. ISO, the insurance industry’s own analyst, explains the economic advantage of a geographically dispersed pool rather than a pool concentrated in one location: Windstorm coverage will be available only as part of the multiple peril package with flood coverage. While any local government theoretically could opt into the program, only coastal co
