Alabama Governor Vows Tornado, Home Insurance Help

Alabama Gov. Robert Bentley said he’s not looking to the Federal Emergency Management Agency or anyone else to lead the state’s recovery.

“Just like I have taken the leadership role in the disaster, telling FEMA I’m in charge, we will do the same thing in the long-term recovery,” Bentley told The Associated Press.

Bentley is also looking into property insurance. He does not support creation of a state-backed insurer but is considering creating a loan fund to help homeowners cover future rebuilding costs.

Since the storms, Bentley has been visiting victims in towns large and small; offering economic incentives to try to get Hackleburg’s largest employers to rebuild; making plans to install storm shelters at trailer parks; and working on legislation for a homeowners’ insurance crisis that has gone from being a coastal problem to a statewide issue.

Bentley said he’s determined to get the recovery moving faster than Louisiana did with Hurricane Katrina, and that’s why he’s not looking to FEMA to take the lead. He said letting FEMA take the lead “causes a mess in a lot of states because they don’t know the people and they don’t know the needs.”

FEMA has been responsive to his approach and to his suggestions, such as rewording its blunt letters to storm victims who are turned down for federal aid, Bentley said.

“I told them from the beginning the governor is in charge of a disaster in the state. We were inviting them in to help us, and that’s what they want. They don’t want to be the lead agency,” he said.

Bentley’s recovery plan includes federal funding, help from faith-based and community groups, and private sector involvement. When they can’t help, he’s raised $4 million in donations for the Governor’s Emergency Relief Fund, which can fill the gaps.

The tornadoes April 27 claimed more than 240 lives in Alabama. Bentley has tried to visit every county where people died. He said his hometown of Tuscaloosa has the industrial base and resources to recover from the tornadoes and “is in good shape.” He sees the challenges in smaller towns, like Hackleburg and Phil Campbell, where many businesses were destroyed.

In Marion County in northwest Alabama, a Wrangler jeans distribution center in Hackleburg was demolished, putting 150 people out of work in a town of 1,500. Unemployment in the county rose faster than the state as a whole after the tornadoes, going from 11.3 percent to 11.9 percent. Bentley said Wrangler’s parent company, the VF Corp., has insurance to rebuild the town’s largest employer if it wants. Whether it will is still unknown.

Bentley promised last year to call a special session of the Legislature to address rising rates and diminishing supply of homeowners insurance along the Alabama coast. He formed a commission to come up with ideas three weeks before the tornadoes hit. The tornadoes changed the commission’s scope.

Bentley said the record amount of insured losses from the tornadoes- estimated between $2.45 billion and $4.2 billion – have homeowners statewide worried about the availability and cost of coverage. Virtually no area of the state has been spared from either tornadoes or hurricanes since Hurricane Ivan caused $2 billion in damage in 2004.

Alfa, the state’s second largest insurer, recently announced it won’t renew coverage on 73,000 homes, or about one out of every six policies.

Bentley said Alabama won’t create a state-owned insurance plan like Florida’s Citizens Property Insurance Corp., which has faced deficits while becoming the state’s largest carrier. Instead, he’s considering using about $100 million that Alabama expects to get from BP for the Gulf oil spill and put it in an investment account.

He anticipates homeowners could buy insurance with a high deductible, possibly $25,000, because it would be much more affordable and available. Then they would pay maybe $25 a month to belong to the investment program. If their homes were damaged or destroyed by a storm, they could borrow their $25,000 deductible from the program and repay over it several years at little or no interest.

So far, nothing is worked out with the Legislature, and there is no date for a special session. “We will not call a special session until we have the problem worked out,” he said. “We are not going to waste taxpayers’ money by trying to have a special session.”

Topics Catastrophe Cyber Natural Disasters Windstorm Homeowners Alabama