When Disaster Strikes. The Question of : Federal Disaster Insurance By: Kyle Willner.

When When DisasterDisaster Strikes Strikes

The Question of :

Federal Disaster Insurance

By: Kyle Willner

•Assistance From Federal Government to residents afflicted by a Natural Disaster

Goal: help compensate for losses due to the Natural Disaster

•i.e. Floods, Earthquakes, Forrest Fires, Landslides, Tornados, Hurricanes…etc

•Floods are the most common, and most costly, natural disaster.

•Relief Comes In many different forms depending on the country and magnitude of the disaster

•Before most forms of federal disaster assistance can be offered, the President must declare a major disaster

•Most common form = Loan : must be paid back with interest

• Average federal Individuals and Households Program award is around = $4,000

•Average duration of a U.S. Small Business Administration (SBA) disaster home loan = 30 years.

•The recipient of a $50,000 SBA residential disaster loan must pay back about $240 a month at 4% interest

Private Disaster Insurance

•Flood insurance claims are paid even if a disaster is not declared by the President

•Homeowners, business owners, and renters can all purchase flood insurance

•Homeowners MAX = $250,000 coverage

•Business owners Max = $500,000 coverage

•Feds say, “Easier to recover quickly” (FEMA.gov)

•Feds want citizens to be responsible and prudent for private disaster coverage

• CA has a High Frequency of Natural Disasters

•Only about 13% of Californians have earthquake insurance

Proposal by State Insurance commissioner John Garamendi

• Says, “Cost of rebuilding after natural disasters is making insurance more costly and less available for many Californians”

•Advocates-creation of National Disaster Insurance Policy to cover all natural disasters in the US. spread risk across a much larger pool of potential disasters, making it more affordable and cost effective

•“California’s propensity for disasters means that we all are at a high risk to lose our homes and other important possessions”

Balboa Boulevard, LA, California, 1994

Northridge earthquake

California Wildfire

Quick Stats

•Area: 268,021 sq km (about the size of Colorado)

•Population: 4,035,461 (July 2005 est.)

•Government: parliamentary democracy (similar to England)

•Independence: September 26, 1907 (From England)

•Legal System: based on English law

(stats courtesy of: CIA World Factbook, 2005 online)

The Point ->

1.New Zealand politically acts fairly Socialist (similar to UK)

2. In terms of size and population NZ is very Small

Yes! New Zealand Has a Huge Amount of Natural Disasters Including…earthquake, natural landslip, volcanic eruption, hydrothermal activity

They Also have excellent Federal Disaster Insurance

•Earthquake Commission (EQC)- primary provider of natural disaster insurance to residential property owners----covers all the above disasters

•EQC was established by the Government in 1945

•Currently about $4.5 billion in the EQC Fund

•Government Guarantee ensures EQC will meet its obligations, regardless of circumstances

Info courtesy of -> http://www.eqc.govt.nz/home.aspx

The type, quality, and quantity of

Federal Disaster Insurance Depends On...

•Frequency of Natural Disasters•Government Perspective- Socialism vs. Capitalism•Amount of taxes citizens of the country pay•Size in terms of population of the country

Tax rate table:

Income (per annum)Tax rate

$0 - $38,000 19.5 cents per dollar*

$38,001 - $60,000 33.0 cents per dollar*

$60,001 or more 39.0 cents per dollar*

http://www.whatstax.govt.nz/why-pay-tax/how-much/