Allstate Insurance pushing for national catastrophe fund

By:Valerie Boey

St. Petersburg, Florida -- If Florida?s hit by a major hurricane like Katrina, Allstate Insurance experts say there won?t be enough money to cover losses. That?s why they?re lobbying Congress to support a national catastrophe fund.

George Grawe, Allstate Insurance Company: ?Urge the federal government to create a national catastrophe fund, because that is the most efficient way to gather dollars to pay the claims from the result of where we live.?

George Grawe says last year?s hurricanes left Florida broke.

George Grawe, Allstate Insurance Company: ?The 2004 hurricanes drained all of the capital from the state of Florida that was available to insure homeowners.?

Under one proposal, proceeds would come from policy holders around the country. It could lower catastrophic insurance in Florida, but may increase rates in other states. That?s why it won?t be easy getting support.

George Grawe, Allstate Insurance Company: ?People have said 'Your company is profiting nationwide, why can?t you take some of the profit form other states and not make our rates go up so much?' Well that?s not the way we?re regulated, We?re regulated at state level.?

That means they can?t use profits from another state in Florida. Insurance companies have to base their rates on damage claims in the state where the policy is written.

Meanwhile, Florida has its own catastrophe fund, but even legislative leaders say it won?t be enough if a major hurricane hits.