Demand for Federal Disaster Insurance
Heavy loss of life and extensive damage to property from floods in the Northeast in August and again in October 1955, and in the Far West in December, dramatized the absence of insurance protection against natural disasters. The tragedy involved in what the Red Cross has called “the worst disaster year in American history” impelled the Eisenhower administration and certain members of Congress to take steps toward developing some form of federal indemnity for losses for which commercial insurance coverage is not now available.
President Eisenhower said in his State of the Union message, Jan. 5, that “Disaster assistance legislation requires overhauling and an experimental program of flood damage indemnities should be undertaken.” The same day identical administration bills to set up a five-year, $3 billion flood indemnity and reinsurance program were introduced in the two houses of Congress by Sen. Prescott Bush (R-Conn.) and Rep. Jesse P. Wolcott (R-Mich.).
Eisenhower's Support of Flood Indemnities
Wolcott explained that the program had to be experimental and flexible because the problems involved were novel and complex and the government lacked experience in the field. Bush said the administration bill sought to provide a “sound, workable program of flood indemnity and reinsurance which the people will be able to purchase at reasonable cost.” He asserted that a plan limited to flood coverage stood the best chance of adoption; to include protection against other forms of disaster, he contended, would make for “socialistic competition with private enterprise” and render the program too cumbersome to handle.