Mitigating Risk: A Simple Way to Solve the Affordable Insurance Crisis

Mississippi Insurance Commissioner Mike Chaney

Mississippi’s insurance officials are trying to bring down insurance rates by mitigating risk. MPB’s Phoebe Judge reports on how this simple plan may be the key to solving the affordable insurance crisis that has been plaguing the Gulf Coast.

Solving the affordable insurance crisis that has taken hold on the Gulf Coast since Hurricane Katrina is a complicated and frustrating endeavor for both those in the industry and the homeowners who are trying to protect their property. But Lisa Miller, who runs an insurance mitigation and consulting firm, says the best solution may be the simplest,

“By strengthening the structures that we live in, by reinforcing the roofs, by putting shutters on windows. Those are the two most vulnerable places in a structure, if you strengthen them you win.”

The Mississippi Department of Insurance agrees, and has commissioned a hurricane wind loss mitigation study to determine just how big an impact simple home reinforcements can have on preventing wind damage during storms, and as a result bringing down claim costs and insurance premiums. Insurance Commissioner Mike Chaney,

“Mitigation is the simplest answer, it’s quick and it’s easy. We have a challenge of convincing the powers that be that the money needs to go to mitigation, which helps everyone and is not just a one term shot to buy re-insurance to lower rates.”

Mississippi has already started delivering wind mitigation grants, which can result in up to 30 percent discounts for those enrolled in the windpool, the insurer of last resort. Commissioner Chaney says he’s in ongoing talks with seven other private insurers in the state about beginning to provide discounts for wind mitigation.