Key Principles emerging from Hurricane Risk Mitigation Leadership Forum, February 2008
Delegates and speakers of the HRMLF concurred that consideration of the following principles was essential for effective hurricane risk management in the future:
- The number one focus of public policy should be reducing risk to human life.
- Loss mitigation works. The science behind mitigation is clear. Properties built under current codes sustain dramatically less damage than do older buildings in hurricane conditions.
- Risk must be reflected appropriately by insurance premiums to communicate transparent signals about potential risks to life, property and environment through market-based prices, and to stimulate investment in cost-effective mitigation techniques
- Sufficient capacity exists in the private insurance and capital markets to cover potential risks from natural perils.
- New development in high-risk areas, and other conduct that increases risk, should not be subsidized, directly or indirectly.
- Construction codes and risk mitigation products have been proven sound and effective. Enforcement of codes and of correct installation directly and significantly impacts loss reduction. Government should play an active role in research, standard-setting and enforcement.
- Models give guidelines, not answers or absolute facts, and there is much good faith variance among models. This should be factored into policy-making.
- Policymaking needs to factor in the uncertainty within the science of hurricane research and forecasting. Increased investment in hurricane research is essential.
- Outreach and educational programs such as My Safe Florida Home, South Carolina Safe Home, FLASH® and IBHS should be supported and encouraged.
- Investment in consumer education is needed is to make mitigation as accepted - and ultimately, demanded - by the public as buying a safe car or wearing a seat-belt.
- Policymakers should aid needy current residents of hazard-prone areas so that they may invest in the safety of their homes and to purchase adequate insurance coverage at risk-based rates. Any such support should be strictly means tested, should come from general public funding and not from insurance premium subsidies, and should include provisions to help avoid or minimize damage. There is no compelling public policy reason to cross-subsidize the affluent, or to encourage an increase in risk or contingent financial obligations.