Professor Adam Scales will join other legal experts in examining the impact of America's largest natural disaster at a legal symposium hosted by the Mississippi College of Law in Jackson, Mississippi on Tuesday, August 29. Topics will include disaster response within the framework of the constitution, insurance and allocating the costs of recovery, and land use issues during rebuilding.
Hurricane Katrina destroyed approximately 350,000 homes, and the scale of this destruction revealed serious shortcomings in relationship between the National Flood Insurance Program (NFIP) and the private insurance industry. During the symposium, Professor Scales will discuss how the NFIP, which provides heavily subsidized flood insurance to homeowners in flood prone areas, has failed because it doesn't draw enough policy holders to fairly distribute the cost of flood losses. Furthermore, because the cost of insurance through the program is subsidized, homeowners lack incentives to relocate, resulting in multiple repeat claims.
Professor Scales will also address problems in the private insurance market, which has been reluctant to enter the flood insurance business because of the difficulty in accurately predicting flood losses. However, because consumers often do not understand the distinction between flood and non-flood coverage, they may think either that they have already secured flood coverage via a homeowners policies or that they will be automatically bailed out by the NFIP even without buying this insurance. Professor Scales's solution to these problems will involve sweeping changes to the NFIP and the requirement that private insurers offer flood insurance as part of a homeowners policies.
Professor Scales is consulted regularly on Katrina-related insurance issues, and has been quoted in the New York Times and the Houston Chronicle. Most recently, Prof. Scales appeared as a guest columnist for FindLaw, a website containing legal news and commentary, addressing the recent decision by a federal judge who ruled that insurance companies do not have to pay for damage caused by flooding during the hurricane. Click here to read the commentary.Email This Page