Insurance difficulties hit entire Gulf Coast
Officials in Gulf states working to improve standards, share information
Friday, August 14, 2009
By GUY BUSBY
Staff Reporter
FOLEY — Insurance is a major issue along the entire Gulf Coast, not just Alabama, and officials in several states are working together to resolve issues such as cost, availability and concerns that legislation could increase rates in areas away from the coast, state Rep. Steve McMillan, R-Gulf Shores, said Thursday.

Addressing a meeting of the South Baldwin Chamber of Commerce in Foley, McMillan said officials are sharing information from studies and looking at combining resources in insurance pools in efforts to help residents and businesses.

"The Mississippi insurance commissioner (Mike Chaney) described it as the No. 1 quality of life issue on the Mississippi coast and the No. 1 economic issue and as far as I can determine that's about the way it is here too," McMillan said. "It's having a real ripple effect."

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McMillan said that at a recent meeting in Biloxi between representatives from Alabama, Mississippi, Texas, Louisiana and South Carolina, officials said Baldwin and Mobile counties are not the only areas having difficulty gaining support from legislators and residents away from the coast. "Every state has that problem," he said. McMillan said that while hurricanes are most often associated with the coast, property in other parts of the state is also damaged by natural disasters.

He said a study by the Alabama Emergency Management Agency found that damaging winds in the state are stronger north of Montgomery than south of the capital. In addition, 65 percent of the insurance claims filed in Alabama as a result of Hurricane Ivan in 2004 were outside Mobile and Baldwin, he said.

People throughout Alabama also must understand that damage on the coast also has an impact on the rest of the state, he said.

"We're working with the bank and insurance commit tee of the Alabama Legislature to try to inform legislators from other parts of the state about the fact that an economic impact that adversely affects us adversely affects them too; that their economy is inextricably tied to ours," McMillan said.

In order to bring down insurance costs, construction standards will have to be better, McMillan said.

"We're going to have to, in my opinion, improve building codes," he said. "We're going to have to improve the train ing of inspectors. The insurance companies are going to have to feel comfortable with the accountability that's in place and know that when they insure a structure that's certified to meet a standard that it will meet that standard."

McMillan said Mississippi recently conducted a study of the effects of high winds on different types of construction. Officials in that state have agreed to share those findings with Alabama at no cost, he said.

On another issue, McMillan said Alabama officials expect that the state will continue to have to deal with financial shortages. He said state revenue dropped 10 percent between December 2008 and July. He said the Education Trust Fund will have $5.7 billion in the upcoming year, down $1 billion from the year before.

"Basically money for classroom materials, textbooks, technology and libraries was either drastically reduced or completely eliminated," he said.

Sen. Trip Pittman, R-Montrose, was also scheduled to attend, but was in Montgomery on Thursday while the Senate continued to work on legislation, chamber officials said.

/cut/.92/cGUY BUSBY/ RegisterRep. Steve McMillan, center, talks to members of the South Baldwin Chamber of Commerce on Thursday. McMillan, R-Gulf Shores, addressed the chamber's quarterly lunch meeting, speaking on coastal insurance legislation and other issues.