The “Big One” is coming.

Weather experts, including AccuWeather, are predicting that New Jersey and the Northeast coast are due for a major hurricane.

New Jersey was badly hit by the Great Atlantic Hurricane of 1944, which made landfall in New Jersey as a category two hurricane, reaching from Cape May to Long Beach Island.   Luckily, the towns along the New Jersey coastline were sparsely populated at the time.  Even as a category two hurricane, the storm caused $100 million in damages, $33 million in New Jersey in 1944 dollars, and 390 lives were lost.

Unlike 1944, however, the New Jersey coast is today filled with densely populated beach towns, with tens of thousands of more people visiting the Shore during the summer months.

Catastrophe is not a threat just to the coast, however. 

Booming growth and development have left the most densely populated state in the union extremely vulnerable to a major hurricane or other natural catastrophe.

When Tropical Storm Floyd hit in 1999, the flooded Raritan River rose to 13 feet above flood stage and caused some of the state’s most catastrophic flooding.  In Floyd’s aftermath, the Borough of Bound Brook battled floods and fires while helicopters and motorboats plucked people off rooftops.

New Jersey mayors need to be particularly aware of, and prepared for, the next natural catastrophe that hits New Jersey.  Every municipal chief executive understands the need for a robust office of emergency management that will coordinate first responder efforts during such a catastrophe.  But as any mayor whose town is in a floodplain will tell you, the longer term effects of a catastrophic flood or other emergency are the true challenge to a municipality’s assets.  These effects come in the form of, among others, public health, safety, and financial challenges related to temporary shelter and the restoration of permanent homes.  Acting now to prepare New Jerseyans, before catastrophe strikes, will surely lessen the impact of a major natural catastrophe, save lives, and mitigate damage. 

According to estimates from A.M. Best, a storm of similar force to that of 1944 would today cost New Jersey $100 billion in insured losses.   A financial backstop to protect our families against such losses, as well as funding that is dedicated to local preparedness and first responder programs, is needed today to prepare for the inevitable natural catastrophe of tomorrow.

Fortunately, many New Jersey officials recognize that the best time to prepare is right now, before the next “Big One” strikes. 

Assembly Bill A-3236, the catastrophe management solution sponsored by Assemblyman Mike Panter, will help New Jersey prepare for the next natural catastrophe by protecting lives and establishing a dedicated, privately-funded resource to quickly restore homes.  Adopting and implementing this legislative proposal is the logical and responsible action that elected officials can take in the face of this real and dangerous threat.

The legislation would create a state catastrophe fund for New Jersey, privately financed by insurance company premiums.

Such a fund is an essential financial mechanism to keep high-quality homeowners insurance available and affordable throughout the state before catastrophe strikes, and to stand behind the private market in the event that a Katrina-like catastrophe hits New Jersey.

The privately funded catastrophe fund would rely on actuarially sound payments which would be deposited into the fund and grow free of taxes, and principal could only be used to pay claims in the aftermath of catastrophe.

Critical to municipal operations, the legislation also sets aside a portion of the catastrophe fund’s investment income for prevention and mitigation programs, as well as for emergency planning and first responder programs.  These initiatives can help save lives and money when implemented prior to catastrophe.

While we don’t know when the next catastrophe will strike New Jersey, we do know that this bill will help prepare and protect the state and its citizens when it does.

Absent this approach, a natural catastrophe could easily turn into a personal catastrophe for millions of state residents.